The 75% Threshold, Question by Question
How the percentage is measured, when it can be blocked, and what it means once it is met.
What percentage of creditors must agree to an IVA?
At least 75% by value of the creditors who actually vote must agree. That is the single threshold set out in law. If creditors holding three quarters or more of the voting debt say yes, the IVA is approved. If they do not, it is rejected, although creditors will often suggest changes rather than turning it down outright.
Is it based on how many creditors or how much I owe?
By how much you owe, not how many creditors there are. Each creditor's vote is weighted by the size of their debt. For example, if you owe £40,000 in total and a single creditor owed £30,000 votes in favour, that is 75% of the voting debt, enough to approve the IVA on its own, even if smaller creditors vote against.
Do creditors who do not vote count?
No. Only creditors who actually cast a vote are counted towards the 75%. Those who do not respond within the voting window are simply excluded from the calculation. This means the decision rests with the creditors who take part, and in practice many creditors do not vote at all.
Why is there a second vote for connected creditors?
To stop the result being skewed. If you owe money to someone connected to you, such as a family member, a second test applies after the main vote. At that stage the proposal fails if more than half by value of your unconnected creditors vote against it. This keeps the real decision in the hands of independent creditors.
Can one large creditor block the 75%?
Yes. Because votes are weighted by value, a creditor owed more than 25% of your total voting debt can stop the 75% threshold being reached on their own. In effect, one big creditor can hold a veto. A good practitioner will know which creditors carry the most weight and shape the proposal accordingly.
Does a proposal with changes still need 75%?
Yes. Whether the IVA is approved as drafted or with modifications, such as a higher payment or longer term, the same 75% by value of voting creditors must agree to it. Modifications do not lower the bar; they are simply the terms on which creditors are willing to give their approval.
What happens once 75% is reached?
The IVA is approved and becomes legally binding on every included creditor. That includes creditors who voted against it and those who did not vote at all. From that point they cannot pursue you for the included debts or add further interest and charges, as long as you keep to the agreed terms.
Is the 75% figure ever different?
No, the 75% by value threshold is fixed in law and does not change from case to case. What varies is how easily it is reached, which depends entirely on who your creditors are and how much each is owed. That is why the make-up of your debts matters as much as the headline percentage.
