Katie Price bankruptcy: Star swerves insolvency as tax man accepts IVA for £22,000 debt

She came within a hair’s breadth of losing everything this morning.

But like a cat with nine lives, Katie Price has bounced back from the precipice of bankruptcy after the tax man agreed to accept her proposed repayment plan for a £22,000 debt.

The star narrowly avoided bankruptcy after agreeing a last minute deal with her creditors.

The former glamour model will keep her house after agreeing an Individual Voluntary Agreement with those who have been pursuing her for cash.

The terms of the deal – and who she owes money to – weren’t made public. 

A spokesperson for the HMRC confirmed they were owed money by the reality star and were part of deal, but were owed a smaller sum than some of her other creditors.

He added: “This a better result for her and for the creditors."

But the deal, agreed with creditors on November 30th, will see the reality star enter a payment plan with an insolvency practitioner.

Katie didn’t attend the hearing at High Court. Judge Jonathan Middleton ordered the ex-page three girl to pay court costs of £881.

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Katie Price bankruptcy: Star swerves insolvency as tax man accepts IVA for £22,000 debt

Katie has agreed a plan
(Image: Quest Red)

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 on October 29.            

It’s not the outcome fans saw coming after rumours flew that she’d declared herself bankrupt.            

According to reports, she was set to reveal the shocking news in a Christmas special of Katie Price: My Crazy Life and declare insolvency ‘wasn’t that bad’.            

"I will be out of bankruptcy in a year. It’s not that bad," she told the show, according to The Sun.

"I’ve got nothing to be ashamed of anymore.

"Loads of people go through it like me.

"It’s just a matter of going through the motions. This is what has to be."

At the time of the first hearing back in August, 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.

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Katie Price bankruptcy: Star swerves insolvency as tax man accepts IVA for £22,000 debt

Katie is sharing custody of Jett and Bunny with her ex Kieran
(Image: Instagram)

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.

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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