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 (plus an additional 2 business days for postage) 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 email, or occasionally by post, and it would be highly unusual for a creditor to actually be present at the meeting, although they can be if they wish.
Equally, there is no requirement for you, the applicant, 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 75%, or more, of your creditors, in debt value terms, to agree to your IVA Proposal. Any less than this percentage and your IVA will be considered rejected.
If a creditor does not cast their vote, then their vote will not be counted and they lose the right to influence the voting outcome.
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 time to consider any modifications that may have been put forward by your creditors.
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 is rejected at the Creditors' Meeting you do still have some options available to you, but what action you take will depend on the reasons for rejection.
Apply For Another IVA
You may wish to consider re-applying for the IVA, especially if your IVA proposal was rejected due to a technical issue that can be overcome if the IVA is represented.
If your IVA was rejected because you were unable to agree to a creditor modification, then you could consider re-applying if you are now in a position to accept the creditors' demands.
The new IVA proposal would incorporate the necessary changes and would stand a good chance of being accepted when represented to creditors.
Re-proposing an IVA
The process of re-applying for an IVA after a previously proposal has rencently been rejected might seem rather a waste of time, but that's not the case.
So long as the reasons for the original rejection are no longer relevant, a new proposal will often prove acceptable.
If you'd like to discuss this with us, please call 0800 856 8569