Katie Price has again managed to swerve bankruptcy by the skin of her teeth in a hearing at London’s High Court today.
The mother-of-five – who once up a time was worth an estimated £45million – has been granted an extension until early December while HMRC decides whether to make her bankrupt over a £22,000 tax debt.
A previous hearing at the Insolvency and Companies court on August 7 saw judges give her 12 weeks to come up with a plan to repay, and Katie handed in her proposal yesterday.
That will now be considered by the tax man before she is due back in court on December 4.
If HMRC accept her proposition then she will not be declared bankrupt.
If not, she could be made insolvent and have a trustee appointed to sell off her assets – including her £2 million Sussex mansion – to raise capital for the creditors.
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What is an IVA?
An IVA – or Individual Voluntary Arrangement – is an agreement between a debtor and a creditor for monies owed to be paid back in scheduled instalments.
It is a flexible procedure which can be altered to fit with the debtor’s changing circumstances, and family and friends can also contribute to the repayment of the debts.
It only applies to unsecured debts, with secured ones such as mortgages usually remaining outside the IVA.
Sometimes debtors can have a substantial amount wiped off if they are able to pay a chunk up front.
At the end of the repayment period, any debts not paid in full are usually written off.
Rachael Lam, representing the HMRC said Katie’s creditors would meet to review it on November 16.
She said: "An IVA proposal from Miss Price was circulated yesterday.
"A meeting of creditors is to be held on November 16."
Faith Julian, representing Katie, said: "I’m instructed to allow for a maximum extension to December 4. I understand the HMRC is okay with that."
Katie is currently in the middle of a 28-day rehab programme for PTSD, and is under investigation following her arrest on suspicion of drink driving earlier this month.
And in a bid to raise cash she’s tried to flog everything from her animals to her beloved personalised pink horsebox, which sadly failed to sell when she put it on ebay for £130,000 less than she paid for it.
At the time of the first hearing, Katie’s rep told The Mirror that she’s been "working with her advisors to resolve her current financial issues."
"She hopes to be in a position to do so and reach agreement with her creditors," her spokesperson said, with a source adding that, "matters were almost agreed."
It tops off a horror 12 months for Katie, whose mum Amy was diagnosed with a terminal lung condition earlier this year.
Her marriage to cheating husband Kieran Hayler collapsed in spring and her summer romance with toyboy Kris Boyson fizzled at the end of August with Kris stating they ‘want different things’.
Peter Andre has since taken their children Junior and Princess to live with him, while the youngest Jett and Bunny are with their dad Kieran.
She checked into rehab as an outpatient in September for treatment for PTSD before being arrested on suspicion of drink driving after allegedly crashing into a bush after celebrating Kris’ 30th birthday in Bexleyheath earlier this month.
After spending 13 hours in the cells she was released pending further investigation and checked back into The Priory as a full-time client, only to apparently flee because the ‘room smelt of cabbage’.
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