Meeting of Creditors

A Meeting of Creditors is carried out before an IVA is activated.

You need a majority of your creditors to approve the IVA proposal before any debt repayment plan can be activated.

The IVA rules for creditors are to review the IVA proposal and vote on whether the IVA can go ahead or reject the individual voluntary arrangement.

In our Meeting of Creditors guide, you will understand everything important about a MOC and how the term ‘IVA meeting of creditors’ can be quite misleading as the creditors are rarely in the same room when voting on an IVA proposal.

What is the meeting of creditors?

The meeting of creditors is the name for a debt repayment review process.

The meeting of creditors happens before any debt solution is approved.

The creditors owed money has to review and sign off the debt repayment plan, with a majority vote needed to be accepted.

The MOC is usually done virtually with votes often submitted in advance of the meeting. The creditors meeting date is really just a deadline for the votes to approve or reject the debt proposal.

What happens before the meeting of creditors?

Before the meeting of creditors, the IVA proposal needs to be created that sets out all the repayment terms being offered to the creditors.

The best UK IVA companies will draft the IVA proposal and send a copy to the debtor for review.

One of the top-rated regulated Insolvency Practitioners will arrange a time to talk over the phone.

The licensed IP like Abbotts Insolvency will make sure an IVA is the best solution and draft the IVA proposal for the creditors to review and vote on it.

All creditors are sent the draft and have up to 28 days notice of the meeting.

What happens during the meeting of creditors?

During the 28 days notice period the creditors start to vote on the debt repayment plan.

More than 75% of the debt value needs to be approved for an individual voluntary arrangement to be approved.

Creditors are allowed to ask for tweaks to the proposal, which are called modifications.

The most common modification request would be an increase in the monthly payments being offered.

During the voting process, the modification requests can delay the approval as the debtor needs to accept changes before an IVA can officially start.

What happens after the meeting of creditors?

After the meeting of creditors, the votes will be counted and results will determine whether the IVA have been approved or rejected.

If the individual voluntary arrangement has been rejected there is still many other debt solutions available like debt management plans or debt relief orders depending on the reasons for rejection.

If the IVA has been approved here are the next steps:

  1. Receive a welcome pack through the post a few days after the meeting of creditors with IVA approval
  2. The nominated IP will handle your case and conduct an annual IVA review
  3. Throughout your IVA, the Insolvency Practitioner will watch over things and make sure the terms of your IVA proposal are followed
  4. 5 years of debt repayments and if terms of the agreement were met, all remaining debts are written off

Your personal insolvency plan will be added to the IVA register on the government website.

Check out the comprehensive guide if you want to know more about the IVA criteria and process for an IVA.

How long do IVA creditors meeting last?

An IVA creditors meeting lasts a minimum of 14 days and a maximum of 28 days.

It’s a UK legal requirement for the creditors to be given notice of the pending IVA Creditors Meeting.

The statutory period that must pass from the proposal being lodged and the Creditors Meeting date is a minimum of 14 days and a maximum of 28 days.

Creditors are given 16 days notice of the deadline for returning their votes, plus an additional two days if they’re voting by mail, and the meeting can be adjourned by a maximum of 14 days if there are any issues with the voting process.

What Happens if Circumstances Change During an IVA?

If circumstances change during the course of an IVA, the debtor needs to have a ‘variation meeting’.

You must tell your insolvency practitioner if your personal circumstances change. Some changes could include mortgage IVAs or receiving inheritance during an IVA period.

The variation meeting is when the IVA proposal would be reviewed and resubmitted to your creditors to cast their votes.

It will be a breach of the IVA agreement if the debtor doesn’t tell the licensed UP when things change.

Can an IVA be refused?

An IVA can be refused if over 75% of creditors agree to the IVA proposal.

Creditors might reject an IVA proposal if the creditors do not believe that the proposed debt repayment plan is enough to meet individual creditor guidelines.

The creditors may reject based on actions in the past if they believe your IVA would be likely to fail because of it.

What happens if IVA is not approved?

If the individual voluntary arrangement has not been approved a variation meeting can be created for creditors to re-cast their votes.

There are debt solutions available like:

Final Thoughts

If an IVA debt repayment plan is the best solution for your personal debts check out how to apply for an IVA in the UK.

If your partner is also struggling with debts there is a joint IVA application that can be taken out so is worth considering.

Many IVA meeting of the creditors is done virtually with most votes done prior to the meeting.

Attending the meeting isn’t actually compulsory and the voting process opens as soon as your creditors are notified of the meeting date.

Creditors can ask questions regarding debts, financial history, and affordability of the monthly payment plans.

But when dealing with a professional debt help company they will highlight all the best debt solutions on offer.

Interested In Finding Out More About The Debt Solutions Available?

Find Out More

You might want to read our in-depth guide to everything you need to know about an IVA debt plan.

IVA Debt Help Information

If you want to know more about the debt help plan of an IVA we have all articles related to individual voluntary arrangements here:

Other Debt Solutions

An IVA is not the only debt solution you have and this is where speaking to a qualified debt advisor is very important.

After speaking to a debt consultant you might realise the best solutions are one of the following:

Make sure you take time to understand all the debt solutions available before making a decision because DMPs (aka debt management plans) are also a popular choice in the United Kingdom.

All UK Insolvency Practitioners

Here is a full list of Insolvency Practitioners in the UK:

The insolvency practitioner list above gives you plenty of options to choose the best IVA firm in November 2023.