What if my creditors don’t agree to an IVA proposal?

Published Tue, Sep 27, 2016 Updated Tue, Feb 16, 2021

If you’ve applied for an Individual Voluntary Arrangement you’ll need 75% of your creditors to agree to your IVA. But what if your creditors don’t agree to an IVA proposal?

Creditor’s Meeting

This is where creditors will discuss your IVA proposal and either approve or reject it. Alternatively, they may make some suggestions to improve your proposal, But if a 75% requisite majority (75% of the owed debt) of creditors confirm the proposal then it’s accepted.

Readjust your IVA proposal

If the creditors have requested that you adjust your proposal before they reconsider, or if your Insolvency Practitioner (IP) thinks it can be approved, then with your confirmation your IP can make these change and adjourn the Creditor’s Meeting for a later date with the new proposal. If the proposal isn’t approved by the 75% requisite majority after 2 weeks then you have to reapply for an IVA.

What are the chances of a creditor rejecting my IVA?

Generally, it is very rare that creditors don’t agree to an IVA proposal. Most creditor’s FAQs and terms and conditions state that if you provide proof that you’re having trouble with debts then they’re happy to accept an IVA. However, this differs from creditor to creditor. But your IP should advise you whether your IVA will be successful or not – so the chances of rejection are fairly slim.

If creditors don’t agree to an IVA proposal and they have good reason, then your IP will be on hand to discuss next steps. It’s important to get some professional advice before filing for bankruptcy – which has more severe consequences.