Once the groundwork has been done and the Insolvency Practitioner is satisfied that details are correct regarding a debtor’s income, outgoings, assets and debts and an understanding of their personal circumstances has been ascertained, then a formal proposal is put to the creditors. Each creditor has the right to agree to the proposal or to reject it.

The meeting itself is not normally a physical meeting but an online exercise often with firms whose job it is to vote on behalf of individual creditors. They will be looking at the reasonableness of the offer and to see if the IVA offers a better return to creditors than bankruptcy might. If it does – then the IVA is likely to be accepted. Creditors representing 75% of the total debt need to agree to the proposal and then it becomes legally binding on all – even if some have voted against it.

Variations may be sought by the creditors – often relating to the Insolvency Practitioner fees – but could involve a change of payment level for the debtor or downsizing of an asset or a change to the length of a plan. When the creditors meeting takes place, debtors are encouraged to be available by phone, so the Insolvency Practitioner can seek agreement to a variation if necessary.