Creditor Approval, Question by Question
How the vote works, when a proposal can be blocked, and what happens next.
Can creditors reject my IVA?
Yes. An IVA is only approved if enough of your creditors vote in favour of it. Your Insolvency Practitioner sends the proposal to everyone you owe, and they vote to accept, reject, or accept with changes. For approval, creditors representing at least 75% by value of those who actually vote must agree. So creditors do hold the final say, though outright rejection is less common than you might expect.
How do creditors vote on an IVA?
Through a formal decision procedure, usually by post or electronically rather than a physical meeting. Each creditor is given a window, typically 14 days, to submit their vote, and every vote is weighted by the size of the debt they are owed, not one vote each. Creditors who do not respond are simply left out of the calculation, so the decision rests with those who actually take part.
What share of creditors must agree?
At least 75% by value of those who vote. The figure is based on the value of the debts, not the number of creditors, and only counts those who actually cast a vote. So if creditors holding three quarters or more of the voting debt say yes, the IVA is approved, and once approved it is binding on every included creditor, even those who voted against or did not vote at all.
Can a single creditor block my IVA?
Sometimes, yes. Because votes are weighted by debt value, a creditor who is owed more than 25% of your total voting debt can prevent the 75% threshold being reached on their own. In practice this means one large creditor can hold a veto. A good practitioner will know which of your creditors carry the most weight and will shape the proposal with that in mind.
What about creditors connected to me?
There are extra safeguards. If you owe money to someone connected to you, such as a family member, their vote is treated separately so they cannot simply push the IVA through. After the main vote, a second test applies: the proposal fails if more than half by value of your unconnected creditors vote against it. This keeps the decision genuinely in the hands of independent creditors.
Can creditors approve it but change the terms?
Yes, and this is common. Rather than rejecting outright, creditors often approve an IVA subject to modifications, for example a slightly higher monthly payment, a longer term, or releasing equity from a property later on. You have the right to accept, counter, or refuse proposed modifications, though refusing point blank can lead to the proposal being rejected. Your practitioner will advise on what is reasonable and affordable.
Why might creditors reject an IVA?
Usually because the return is not enough. The most common reason for rejection is that creditors do not think the proposed payments offer them a fair enough recovery, often compared with what they might get from bankruptcy. Doubts about affordability, missing information, or concerns about your conduct can also play a part. A realistic, well-evidenced proposal is far less likely to be turned down.
What happens if my IVA is rejected?
It is not the end of the road. If your proposal is rejected, nothing is imposed on you, and you are free to consider other routes such as a Debt Management Plan, a Debt Relief Order or bankruptcy. In some cases your practitioner can revise the proposal, addressing the creditors' objections, and put forward a new one. A free adviser can also help you weigh up what to do next.
How can I improve the chances of approval?
Make it your best, most realistic offer. Proposals are most likely to be approved when the payment genuinely reflects what you can afford, the figures are properly evidenced, and the arrangement follows the agreed IVA Protocol standards. A reputable Insolvency Practitioner will only put forward a proposal they believe creditors will accept, which is one reason it is worth choosing carefully. Never pay upfront fees, as you could lose them if it fails.
