IVA Creditors' Meeting
If you're researching the IVA subject you may hear reference to the Creditors' Meeting and wonder what it is.
So, here's a brief description of the Creditors' Meeting and explanation of the significance it plays within the application process.
The Starting Point Of Your IVA
Quite simply, the Creditors' Meeting marks the actual starting point of your IVA.
When you've returned your signed IVA Proposal to your Insolvency Practitioner (IP) their next task will be to set a date for the Creditors' Meeting to take place.
The purpose of the Creditors' Meeting is to give your creditors an opportunity to vote on whether they accept or reject your IVA Proposal.
Giving your creditors legal notice
It's a legal requirement for the creditors to be given notice of the pending Creditors' Meeting.
The statutory period that must pass between the proposal being lodged with the court and the Creditors' Meeting date is a minimum of 14 days and a maximum of 28 days.
This notice period is set to ensure there's enough time for your creditors to be ready to cast their vote.
Who attends the meeting?
The meeting itself is more like a virtual meeting, as it's not a meeting anyone must attend in person.
Indeed, most votes will be cast by fax, email or post and it would be highly unusual for a creditor to actually be present, although they can be if they wish.
Equally, there is no requirement for you to be present either. However, most IPs will ask you to be available by phone should they or one of their representatives need to contact you during the meeting to discuss any issues that might require immediate clarification.
It's also possible for a creditor to cast their vote prior to the meeting and forward it to the IP beforehand. If this happens, the vote will be held on file and counted as normal with the other votes at the meeting.
Voting At The Creditors' Meeting
Even though the meeting is now almost completely virtual, it still carries major significance in the process as it's the focal point of your application.
The chairperson of the meeting is, amongst other things, responsible for counting the votes and establishing whether the IVA has been accepted or rejected.
Each creditor has a vote equal to the amount they are owed as a percentage of your total debt.
For instance, if your overall debt is £20,000 and you owe a creditor £2,000 then their vote counts as 10% of the total votes available.
For your IVA to be considered accepted you need more than 75% of your creditors, in debt value terms, agree to your IVA Proposal. However, any less than this percentage and your IVA will be considered rejected.
If a creditor does not cast his vote, then their vote will be counted as if they'd cast it along with the majority.
Once 75% of the vote has been reached, your IVA become legally binding on all creditors in the IVA, whether they voted to accept the IVA or not.
Creditors' Meeting adjournments
If necessary, your Creditors' Meeting can be adjourned for up to a maximum of 14 days after the original meeting date. An adjournment can provide you or your creditors time to consider any modifications that may have been put forward.
An adjournment can also be used should there be a situation where no creditors have voted at all. The IP or one of their representatives can then canvass creditors for the necessary votes during this time.
Strangely enough, it is not unusual for creditors to occasionally miss out on voting at the Creditors' Meeting.
This could be for many reasons but, in general, it would usually be down to the sheer workload they might be experiencing, which, as you're probably aware, is growing all the time.
What can I do if my IVA is rejected
If your IVA application fails at its Creditors' Meeting you do still have some options available to you, but what action you take will depend on the reasons why your IVA application failed.
In some situations deciding what to do next will be relatively straightforward, but other times, it'll be more complex.
Apply For Another IVA
You may wish to consider re-applying for another IVA, especially if your IVA proposal failed due to a technical issue.
For instances, if your IVA failed as a result of a creditor failing cast their vote in time, then a re-application would be your first course of action, so long as the missing votes represent a large enough percentage to overturn the original result.
If your IVA failed because you were unable to agree to a creditor modification, then you could re-apply if you are now in a position to accept their demand.
The new IVA proposal would incorporate the necessary changes and would stand a good chance of being accepted at the next Creditors' Meeting.
Re-proposing an IVA
The team behind IVA.info are specialists in helping people re-apply for rejected IVA's, particularly when there's to be a material change to the original IVA proposal.
The process of re-applying for an IVA after a failed attempt might seem futile, but you'd be surprised how often it is necessary. Our Insolvency Practice has more experience than many others in this area, giving them a distinct advantage when it comes to re-applications.
There's no charge for the consultation, there's no obligation to act on our advice and your enquiry will be held in the strictest confidence.
Please call 0800 088 7502 to have a chat with an adviser now or complete this form.
Other options
However, if you decide to concede that your IVA application has been permanently rejected then you will need to consider your alternatives.
A Debt Management Plan is an informal arrangement that is sometimes used as an alternative to an IVA.
And if you believe a Debt Management Plan will be ineffective in dealing with your debts you'll need to explore the option of a Bankruptcy.
Bankruptcy is usually the last choice for people but, since the introduction of the Enterprise Act in 2004, there have been significant changes to soften the bankruptcy process.
Follow this link to find out if bankruptcy could benefit you.
