What happens if some of my creditors disagree with the IVA?
Not all creditors may agree to an IVA...
We receive a lot of calls and emails from the public asking; "What happens if some of my creditors disagree with the IVA?".
If the IVA proposal is rejected there is usually a good reason. If the creditors disagree with the IVA offer then it can modified to get the creditors to accept it.
At the creditors meeting, where the creditors vote on the proposal being offered, you may be asked to attend, along with the representative of the Insolvency Practitioner. Your attendance is seen as a sign of your good intention to repay your debts through the IVA. However most creditors’ votes at the meeting are doing via fax or email these days and it is not very common for the client to have to attend a creditors meeting.
What actually happens at the IVA creditors meeting?
For the creditors to approve the IVA then 75% of them must agree. The 75% figure is in value in £pounds not the number of creditors you have.
This is quite confusing so please understand that “in value" means in money terms not the actual amount of creditors. E.g. if you have 20 separate creditors adding up to £25,000 , you do not need 15 of them to accept for the IVA to work. In theory you need £18,750 in value of them to accept.
What make this more confusing is not all creditors actually vote so the 75% in value is only of the amount in value that vote on the day of the IVA meeting.
Can the IVA creditors ask for more money to be put in the IVA?
Yes, what happens is they ask for modifications to the IVA offer. So if you originally offered £200 per month, then they may ask for £250 per month. This only happens if you can afford it or they see you are spending too much on luxury items such as smoking or pocket money.
Do some creditors not accept IVAs?
There are certain creditors, such Paragon, Northern Rock, HSBC, RBS Group, M&S Money, HBOS, and First Direct who require specific dividends over the 5 years. In the main, most creditors would look to at least 25% of their money back through the IVA, however the Insolvency Practitioner will be able to assess the latest requirements of the creditors involved before putting forward the proposal.
If a debt is quite new, then there is a risk that a creditor will reject the IVA proposal. If the creditor thinks, that the debtor obtained the money when they knew they couldn’t afford to repay it, then this could be seen as having fraudulently obtained money.
What other debt options are available if my creditors disagree with the IVA
- Bankruptcy
- Debt Management Plan
- Trust Deed (if you live in Scotland)
- Remortgage
- Sell and rent back your property
- Equity Release scheme
If you wish to discuss what happens if some of your creditors disagree with the IVA and how an IVA can help you please complete the following form or telephone freephone 0800 074 6918.
IVA Knowledge Base Menu
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- Is the IVA registered on your credit file? |
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- Do I have to tell my partner if I do an IVA? |
- Does an IVA cover all of my debts? |
- What is the difference between a secured and unsecured debt? |
- Do creditors have to accept an IVA? |
- Can an individual creditor refuse to accept an IVA? |
- Will the IVA prevent my creditors taking further recovery action? |
- What if my circumstances change whilst in an IVA? |
- Can I cancel the IVA once it is set up? |
- What happens if I just stop paying into the IVA? |
- How long does it take to set up an IVA? |
- Will interest and other charges be frozen while the IVA is being set up? |
- Can a creditor take further recovery action before the IVA is approved? |
- What happens if the IVA is not approved? |
- What Does IVA Stand For? |
- How do I work out how much I can afford to pay per month in to an IVA? |
- I am considering an IVA. How does it work? |
- Do I have to attend IVA meetings, or can this all be done by post? |
- What do creditors expect from an IVA? |
- How likely is it that an IVA will be accepted? |
- Are all creditors forced to accept the IVA majority decision? |
- What happens if the creditors don't like the IVA deal? |
- What do I do if the IVA is rejected? |
- IVA - Individual Voluntary Arrangement |
- I've buried my head in the sand, now I've got a bankruptcy petition hearing next week. Can I do an IVA at this late stage?
- Will an IVA really write off all of my debts?
- Will I live in poverty for the duration of the IVA? |
- What if I win the lottery whilst in an IVA? |
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- Will my IVA appear in the newspapers? |
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- Is an IVA more expensive than just going bankrupt?
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- I run a business. What will happen to my business in an IVA?
- Will my partner have to contribute to my IVA?
- My partner and I have joint debts. Can we lump them all together in the same IVA?
- What happens if I'm unable to keep up with the IVA payments?
- What happens at the end of the IVA arrangement?
- Are there any upfront fees with an IVA? |
- Why should I consider an IVA over bankruptcy? |
- What are the advantages of an IVA over a debt management plan? |
- How will an IVA Improve my life? |
- Is there immediate relief if I do an IVA? |
- How much debt do I need to do an IVA? |
- What types of debt can an IVA deal with? |
- Can utility bills be included in an IVA? |
- Will an IVA stop collection calls? |
- Will an IVA freeze my interest rates? |
- Will I have to sell my house if I do an IVA? |
- Will an IVA stop home repossession? |
- How will An IVA affect my home equity? |
- Can I keep my car if I do an IVA? |
- What assets might an IVA affect? |
- Will an IVA be reflected on my credit file? |
- Do I need to include all my creditors in an IVA? |
- Can I apply for credit while I'm in an IVA? |
- Will I need to change bank accounts in an IVA? |
- What will my monthly payment be on an IVA? |
- What if I am unable to keep up with my payments in an IVA? |
- Can my IVA payments go up? |
- Under what circumstances can I reduce my IVA payment? |
- Who will know if I do an IVA? |
- Will my landlord need to know if I do an IVA? |
- I've decided to do an IVA, should i stop paying my creditors now? |
- Will an IVA affect my employment or my ability to get a job? |
- I'm in an IVA and I've lost my job, what can I do? |
- What situations would prevent me from doing an IVA? |
- I've been told I can't do an IVA, what should I do? |
- Can I exit out of my IVA before five years? |
- Under what circumstances can an IVA proposal be rejected? |
- What percentage of IVA's are blocked by creditors? |
- What happens if my IVA fails? |
- What if I can't remortgage as per my IVA proposal? |
- My husband and I are considering an IVA as a solution to our £25,000 debt |
- What happens if I change from being employed to self employed during my IVA? |
- If my partner enters an IVA will I have to sell my car because it is registered in my name? |
- What happens if my income rises during an IVA, would the creditors want all of the increase? |
- What is the minimum level of debt for an IVA? Is it 12000 or 15000 pounds? |
- Can I keep my home if my IVA is accepted? |
- Will I have enough money to live if I go for an IVA? |
- Information on the IVA procedure in the UK |
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IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
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