Importance about IVA

IVA is a solemn process. It should not be seen as a way to delay a debtor's repayment liability or to mislead the creditors. The debtor must be honest and truthful in the process. He must have his financial position fully and frankly disclosed to the nominee or creditors. Failure to do so may result in criminal prosecution.

The debtor commits an offence if he makes any false representation or commits any other fraud for the purpose of obtaining the approval of his creditors to a proposal for a voluntary arrangement. A person guilty of such offence is liable to a fine at level 2 ($2,001 to $5,000) and to a imprisonment for 6 months.

If the debtor enters into a voluntary arrangement but fails to give full details of his assets and liabilities or fails to do what he has agreed under the arrangement, the nominee of it, or any creditor bound by it, may still petition for his bankruptcy.