In the past, when the legislation was first put together 19 years ago, there would actually be a physical creditors’ meeting. The creditors would sit at a table looking at the client, and the Insolvency Practitioner would sit there reading out the proposal. Nowadays, however, people do not go to the inconvenience of calling a physical creditors’ meeting – only the name remains. Large creditors instruct Grant Thornton or someone else to vote on their behalf, as it were by proxy. In their representative capacity, they take instructions from creditors to vote in a particular way, according to a particular set of guidelines. So the client does not need to turn up. You could call it a paper meeting. As soon as the meeting happens, one of the IP’s team or staff monitors the proxies as they come in, and as soon as they have enough creditors who have accepted the IVA to make it a success, they contact the client and tell them the good news.
Archive for the ‘IVA Help’ Category
What is a Creditors’ Meeting?
Friday, November 6th, 2009What is a Debt Advisor and an Insolvency Practitioner?
Thursday, October 22nd, 2009Debt Adviser
These are the people you would usually speak to first when researching debt solutions. A good debt adviser will talk you through all the options available to you so that the best option naturally becomes apparent. Beware unscrupulous Debt Advisers who demand large upfront fees or try to steer you towards one solution in particular without listening to you properly. Your Debt adviser should be knowledgeable, objective and clear in the way they explain the options to you. Their initial advice should always be provided for free.
Insolvency Practitioner
This is the person who will draft your final IVA proposal, negotiate it with your creditors, and supervise your arrangement throughout the IVA period. A good IP possesses various key qualities: they are readily available and easy to get in touch with; they are objective, patient and non-judgemental; they have a good reputation and positive online reviews on forums such as the one at iva.co.uk. You can either get in touch with an IP yourself directly, or be referred to one through a Debt Adviser.
How are IVAs decided?
Tuesday, October 20th, 2009Upon the successful completion of the IVA the debtor will be considered debt-free, even though they may not have actually paid off all of their debts in full. Any outstanding balances are written off and the debtor is then free to make a fresh financial start.
It is worth noting that if you do enter into an IVA and you have a reasonable amount of equity in your property, then it is likely that some of it will have to be released at sometime during the arrangement so it can be paid to creditors. Drastic as this may sound it can be a deciding factor in whether an IVA is approved by creditors and a realistic way in which a debtor can retain their property. Sometimes an IVA can be proposed on the basis of equity release alone. This is called a ‘full-and-final settlement’. There is also an option of settling an IVA early if money suddenly becomes available to the debtor. This is called an ‘early settlement’.