| IVA Saves Celebrity Chef's Bacon |
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| Written by James Robinson |
| Sunday, 21 March 2010 16:40 |
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Celebrities are also susceptible to debt issues, not just us normal people! Take the case of Paul Rankin, a celebrity chef, who only avoided going bankrupt because he entered into an IVA.
Celebrities are also susceptible to debt issues, not just us normal people! Take the case of Paul Rankin, a celebrity chef, who only avoided going bankrupt because he entered into an IVA. Rankin, along with his partner, were sent bankruptcy orders due to some unpaid debts that they owed, however after appearing in court it was thrown out due to the fact that the couple had entered into an agreement that Rankin would take out an IVA. The Individual Voluntary Arrangement is a legal alternative to bankruptcy for those who do have an income and are therefore able to make regular repayments against monies owed, but who simply cannot afford the debts at their existing level. It is an agreement between a debtor and his or her creditors that takes into account how much the debtor earns and what their living expenses are. Based on this, an amount that the debtor can realistically afford is decided upon. This is a set monthly payment for an agreed period of time, usually a five years. The best part of an IVA is that there is a set ending time, and after that the debt is written off and considered to be fully paid. This is great for the debtor as they don't have to pay back as much, but are able to still settle the debt. It is much better for the creditors too as bankruptcy would lead to them receiving nothing, whereas an IVA would lead to them at least getting some of the debt paid back to them. It is not a breeze to get an IVA approved, creditors making up 75% worth of the debt have to agree to the terms, otherwise it will not happen, though even if the other quarter don't agree it will still go through. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. James Robinson is an expert in the field of debt management and iva |