We know that finding the right debt management can be stressful and sometimes confusing. That’s why we’re here to help guide you through the process. Read on to find out everything you need to know about a meeting of creditors
If you’re struggling to keep up with your repayments and feel that entering an IVA could be the best choice for you, you can rely on My Debt Plan to help you take control of your finances. But there is one more step to consider before your plan can start: a meeting of creditors. Our guide will explain what happens at a meeting of creditors, how it works, and what to expect afterwards – and don’t worry, we’ll be by your side through it all.
What is a meeting of creditors?
A meeting of creditors, sometimes known as a MOC, is an important part of the process when applying to enter a IVA and it must take place before your solution can start.
The word ‘meeting’ is a bit misleading as it’s rare that a face-to-face meeting ever takes place. Instead, it’s the term used to describe the period of time when your creditors can review the IVA proposal that’s been put together by your insolvency practitioner.
Voting creditors must cast their vote to say whether they approve the proposal using a voting form. The date of the meeting of creditors acts as the deadline for all votes to be submitted. Creditors can choose to attend the meeting by joining a conference call or hopping online via Zoom or Microsoft Teams, but they don’t have to be present if they’ve already voted.
You don’t have to be at the meeting either but you must be available on the day by phone so that your insolvency practitioner can let you know the outcome of the vote.
What happens at a creditors’ meeting?
Before the meeting of creditors takes place, your insolvency practitioner will have put together an IVA proposal. This is a document that sets out the terms of how much you’re offering to pay each month and how long the IVA should last. You’ll receive a copy of the IVA proposal, but you should also ask your practitioner to talk you through all the details so that you can be completely sure it’s the right solution for you.
Everyone you owe money to will receive a copy of the proposal to consider. They’ll be given a maximum of 28 days’ notice before being asked to vote on it. Voting creditors must represent 75% of your debt must agree to the terms for the IVA to start and each creditor has a vote equal to the amount they’re owed as a percentage of your total debt. In other words, the largest debt holders will get the biggest say.
After a meeting of creditors
There are three possible outcomes after a meeting of creditors. In most cases, your creditors will agree with your IVA proposal and vote in favour of it. Insolvency practitioners work hard to put together that have a good chance of being approved but, of course, this result is not guaranteed.
Sometimes, creditors will ask for changes to be made. These are known as modifications and occasionally will request an increase in your monthly payment amount or for the IVA to last longer. Don’t feel pressured to accept the requested modifications if you’re not sure they’re right for you. Take time to think about whether they will work for you and your budget – you can also ask for the meeting of creditors to be postponed if you need more thinking space. Remember, an individual voluntary arrangement is legally binding and could last up to six years; it’s a big commitment.
Creditors can also ask questions about your debts, financial history, and affordability. If they’re not satisfied that the IVA proposal would be the best solution for them, they can decline to approve it. That doesn’t mean it’s the end of the road: you can always work with your insolvency practitioner to modify the proposal or explore other options.
Are you considering entering an IVA or looking to explore your debt management options? Our friendly debt advisors are always happy to talk through the solutions available. Call us on 0161 660 0411 or send us an email here
