For those people who have come across the term ‘IVA Variation Meeting’, here is a brief explanation of what it is and how a variation meeting may be used by someone in an IVA.
When a person in serious financial difficulties has chosen an IVA as their preferred debt solution, they will have agreed to the terms and conditions of their IVA at an original IVA creditors meeting.
A significant change in the debtor’s circumstances may mean that the original terms of the IVA proposal can no longer be adhered to, but may not necessarily mean that the Individual Voluntary Arrangement (IVA) has to be abandoned.
If the debtor is able to make a revised offer to their creditors then an IVA Variation Meeting can be convened, to allow creditors an opportunity to consider the proposed variations to the original IVA.
The IVA Supervisor will prepare a report for the creditors, giving details of the changes in the debtor’s circumstances, together with an explanation of why the original proposal is no longer achievable.
The report will contain details of the revised offer to creditors and a financial statement detailing the revised dividends to creditors, compared to the original expected dividend, and the IVA Supervisor will give comment to support the notion that the variation to the IVA still represents the debtor’s best offer to the creditors.
The IVA Supervisor is required to give a minimum notice period of 21 days to creditors notifying them of the variation meeting, though this period can be as much as 28 days, depending on the terms of the original IVA proposal.
The voting rights and process are exactly the same as the original creditors meeting, with a majority in excess of 75% of the creditors voting, in ‘percentage of debt owed’ terms, required for the Individual Voluntary Arrangement’s (IVA’s) variation to be approved.
For further information on Individual Voluntary Arrangements (IVAs) click here or call My IVA Adviser for free on 0800 088 7503 to speak to one of our IVA specialists.
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