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What is an Insolvency Practitioner (IP)?

 

As part of the process of applying for and setting up an IVA, a Meeting of Creditors is held. So what does this actually mean and who attends the meeting?

In order to have an IVA proposal legally approved, a meeting is held with all of the companies to whom you owe money. This is known as a Meeting of Creditors (sounds obvious now doesn’t it :)). At this meeting, your Insolvency Practitioner provides your IVA proposal to all of your creditors who then have to vote on whether to accept the terms of the IVA proposal, or to reject it.

There are a few things worth noting:

  • Very rarely will the meeting be a physical meeting- it is usually a virtual meeting held via an online video platform such as Zoom or MS Teams.
  • You will not have to attend this meeting, it is between your IP and your creditors so there is no pressure on you in relation to having to attend the meeting.
  • All of the companies who you owe money too are invited to attend and submit their vote and are consequences if they do not vote - read more below.
  • Just because your creditors have attended the meeting, doesn't mean that your IVA proposal will be accepted.
  • The proportion of debt that each creditor is owed defines the 'weight' of their vote, with some creditor votes being more important than others - read more below.
  • The date of the meeting isn't usually a day on which the meeting will actually be held, instead, it relates to the time when all votes have to be received.

Frequently asked questions.

What happens if one or more of my creditors does not respond in time for the MOC?

If a creditor fails to respond to the MOC request for their vote, they usually tend to lose the right to vote at all. The creditor is still bound by the terms of the IVA though as long as the other creditors vote in favour of accepting your IVA proposal.

How is the weight of vote determined?

This is quite straightforward to explain. Basically, the vote of the creditors to whom you owe the most too is given more weight – so larger creditors have influential on the vote than smaller ones. For example, if you owe 60% of your total debt to one creditor, that creditors vote is given more weight than a creditor who you only owe 5% of your total debt to. Does that make sense? Please give us a call if it doesn’t and we will explain it further.

What needs to happen for my IVA proposal to be accepted?

Your IVA is accepted and can go ahead as long as at least 75% of creditors (by total amount of debt) agree to your proposal. This doesn’t include the creditors who chose not to respond to the MOC request – their vote will not count and they will be bound by the terms of the IVA despite them not providing a vote at all.

So what happens if my IVA proposal is rejected by my creditors?

If your creditors reject your IVA proposal, your IP will let you know straightaway. It’s not the end of the world though, it maybe that you and your IP need to amend the proposal before submitting it again (these are referred to as ‘modifications’). They will have a good idea of what the creditors expect from you following the meeting. If all else fails, your IP can also look at alternative debt solutions that can help you manage and reduce your debts.

If you are still unsure whether a IVA is the best solution to help manage your debts, we can help you explore your options further. You can call us on 0161 660 2510 or complete our online IVA enquiry form and a member of our team will call you back.

Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX.

Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX.

© 2024 Advice Centre Group Ltd.

www.yourdebtadvisor.co.uk is a trading style of Advice Centre Group Ltd registered in England and Wales (14322979). Registered office: Second Floor A, Cheadle Place, Cheadle, Cheshire, England, SK8 2JX. 

Advice Centre Group works in reasonable contemplation of ivas. If you decide on another solution other than an iva we will pass you to our partner Dissolve Debt Limited, which is authorised and regulated by the Financial Conduct Authority to provide debt advice, firm reference number 662423. 

Entering into a debt management plan, you will be made aware of any fees before you contract into any agreement, and you will be given plenty of time to think about what you want to do before making a decision. At no stage are you under any obligation and you are always protected by your consumer rights.

Adam Southard is authorised as a Licensed Insolvency Practitioner in the United Kingdom by the Insolvency Practitioners Association, We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meet the criteria for one of our insolvency solutions, therefore, all advice regarding Individual Voluntary Arrangements (IVA) is given in reasonable contemplation of an insolvency appointment.

Adam Southard is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Office Holder No. 11930

Insolvency Practitioner Directory- Insolvency Practitioner Details (bis.gov.uk)

What you need to know about Individual Voluntary Arrangements (Insolvency Service)

We provide solutions to individuals throughout the UK, We Will help recommend solutions available, tailored to your circumstances in which you can then make an informed decision about which solution you qualify for.