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:
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.
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.
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.
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: Dissolve Debt Ltd, Paul House, Stockport Road, Timperley, Altrincham, Cheshire, WA15 7UQ
Registered office: Dissolve Debt Ltd, Paul House, Stockport Road, Timperley, Altrincham, Cheshire, WA15 7UQ
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