In short, if 75% of the value of the creditors who vote by the date of the Creditor Meeting say yes, then your IVA is accepted.
Once the IVA is accepted, then all of the creditors listed in the IVA proposal document (even the ones who didn’t bother to vote) are bound by law to bide by the terms of the IVA (they cannot bother you again).
If you are seriously considering applying for an IVA, you may have heard the term 'Creditors Meeting'. But what is a creditors meeting and how does it affect you?
Once your Insolvency Practitioner (IP) receives all of the necessary information to draw up your IVA proposal, they will arrange a meeting with all of your creditors to put the proposal to them.
This meeting gives your creditors the opportunity to pass a vote on your proposed IVA. If the creditor finds the terms of your IVA acceptable, they will vote in favour of it. If they don’t agree, they’ll vote against it. In order for it to be accepted, 75% of your creditors, will need to vote in favour. This is a percentage of your total unsecured debt, not of the number of creditors.
There is a minimum period of time that must pass between the proposal being lodged in court and the date that is set for the meeting to take place. The creditors meeting will take place between 14 and 28 days of the proposal being lodged in court. This is to give the creditors enough time to properly understand and analyse the terms of the IVA proposal.
Your creditors need not attend the meeting in person. In fact, most votes for the IVA are cast by fax, telephone or post.
You need not be present in this meeting either. However, you must be available should your IP find it necessary to contact you during the course of the meeting, in case there are some issues that need to be cleared.
The creditors meeting can be adjourned at any time for up to 14 days after the original meeting date. This is to give you and your creditors enough time to consider any modifications that were requested. There could also be an instance where no creditor votes are cast at all. In this case, the 14 day minimum time period allows busy creditors to cast their vote.