Has your IVA been rejected?
As part of the IVA process, each creditor will be given a chance to voluntarily accept or reject the offer being made through your IVA proposal.
As a result, there's always the possibility that a creditor will choose to reject your IVA.
When Is An IVA Rejected
The decision as to whether your IVA will be accepted or rejected will be made during your Creditors' Meeting, the virtual meeting that your Insolvency Practitioner (IP) will hold in order to count the votes from your creditors.
During the meeting your IP, or one of their representatives, will receive notice from each creditor as to whether they accept the offer you made through your proposal or whether they reject it.
For the IVA to be 'accepted', more than 75% of your creditors, in debt value terms, must vote to accept your proposal.
Conversely, if 25% or more of your creditors, in debt value terms, choose to reject your proposal then your IVA is considered to have been rejected.
What to do next
Having an IVA rejected doesn't mean you're restricted from proposing another IVA in the near future, in fact, assuming the reason the IVA was rejected can be addressed quickly, there's no reason another proposal couldn't be prepared straightaway.
Sometimes, however, it may be necessary to opt for a longer period between Creditors' Meetings to give sufficient time to rectify the issues that caused the rejection, if at all possible.
But there will, inevitably, be occasions when it simply won't be possible to appease creditors and, when this happens, the prospects of successfully re-proposing an IVA will be slim.
The options available to you after a rejected IVA are pretty much the same as they were prior to the IVA being proposed in the first place.
So the first thing to do is get an re-appraisal of your situation.
You could return to the company that first advised you, or you could seek a fresh opinion by approaching a completely new company for a fresh appraisal of your situation.
Either way, you should act quite quickly if you want to stay ahead of your creditors because they'll be keen to find out how you intend to resolve your debt problem.
The best option for you will depending on your personal circumstances, such as what assets you own, what you do for a living and the size of your debts, but you should be, at least, advised on the suitability of these 3 options:
- A Debt Management Plan.
An informal arrangement which offers reduced payments to creditors for a flexible period until the whole debt has been completely repaid.
A formal debt solution under which you must surrender your assets and repay what you can afford for a maximum period of 3 years.
- Debt Relief Order.
A formal arrangement for people with debts of less than £15,000, with no assets to protect and less that £50 per month to spend on their debt.
If you initially approached your creditors with a proposal for a Joint IVA alongside your partner, it might now be advantageous to choose a different debt solution from each other, to best deal with your individual circumstances rather than trying to deal with your debt problem jointly.
One of you might be best advised to enter a Debt Management Plan whilst the other is more suited a Debt Relief Order. But whatever your preferences, you should seek advice together to ensure you both find a resolution.
Professional IVA Advice
If you've recently had an IVA rejected and would like us to take a look at your situation, then please call 0800 088 7503 or simply complete the form below.
The team here at My IVA Adviser will use our experience to appraise your situation and establish whether you have realistic chance of applying for another IVA.
If proposing an amended IVA isn't an option for you, we'll help you to understand the different options you do have and how they would work for you.