Variation Creditors' Meeting
For those people who have come across the phrase 'Variation Meeting', here is a brief explanation of what it is and how it is used by an Insolvency Practitioner to keep an IVA on track.
What Is A Variation Meeting?
A 'Variation Meeting' is the name given to a 'Creditors' Meeting' held mid-way through the term of an IVA, convened specifically for the IVA candidate to propose a change to their original IVA proposal.
The Variation Meeting is usually chaired by the IVA Supervisor or a member of their staff.
As with the original IVA Creditors' Meeting, the meeting is usually a virtual affair, with no legal obligation on either the IVA candidate or their creditors to actually attend in person.
Creditors will be asked to vote on the amendments, or variation, being proposed. Again, there needs to be a 75% majority (percentage of your total debt, not creditors), accepting the variation before it can be considered legally binding.
IP discretion under the IVA Protocol
Since the introduction of the IVA Protocol in February 2008, the need for Variation Meetings has reduced to some degree.
The IVA Protocol introduced new powers of discretion for Insolvency Practitioners, allowing them to make modest reductions in IVA contributions and sanction payment breaks of up to 6 months without the need to gain creditor approval.
The limits of their discretion are detailed in the terms and conditions of all protocol compliant IVAs.
These changes were introduced along with a raft of other measures as part of the IVA Protocol, with the intention of streamlining the IVA process and, in turn, reducing IVA costs to creditors.
Why would a Variation Meeting be called?
A Variation Meeting would normally be called if the IVA candidate needs to propose a material change to the original agreement.
This could be for a variety reasons, but most will relate to a change in the candidate's circumstances, affecting their ability to maintain the IVA in its present form.
The meeting allows a variation to be tabled, outlining the changes to the original proposal, necessary for the IVA to continue.
Common variations include a reduction to the IVA contributions, a change to the term or duration of the IVA or an offer of early settlement.
Why would creditors accept a variation?
Creditors recognise that personal circumstances change, but a change may not necessarily mean that the IVA has to be abandoned.
In the majority of cases, a variation to the original terms still represents a better outcome for creditors than that which they could expect through the bankruptcy process.
A Variation Meeting tends not to be such a drawn out affair as the original Creditors' Meeting and can be convened relatively quickly, with a minimum notice period to creditors of 21 days, though this period can be as much as 28 days, depending on the terms of the original IVA proposal.
How do I arrange a Variation Meeting?
If you need to request a variation to your original IVA proposal, the best course of action is to approach your IVA Supervisor.
Explain to them the change to your circumstances that has brought about the need to vary your agreement and outline your request. They will be able to organise the Variation Meeting for you.
Apply For An IVA
If you are thinking about applying for an IVA and would like to have a chat with an IVA adviser, please call 0800 088 7502
There's no charge for a consultation, there's no obligation to act on our advice and your enquiry will be held in the strictest confidence.
Alternatively, complete this form and one of the team will contact you at your preferred time.