IVA and Creditors: The Rights of Creditors

Wondering how an IVA might impact a creditor? This article explains everything you need to know about IVA and creditors. It describes the rights of creditors and their involvement in the Individual Voluntary Arrangement (IVA) process.  


A debtor has deliberately omitted me from their IVA, what should I do?


If a creditor finds that they have been omitted from an already established IVA they can apply to the Insolvency Practitioner (IP) in charge of the debtor and request that they are included in the IVA. Information regarding the IP can be located on the Individual Insolvency Register.

In the case that the IVA has not gone through then you can apply to the courts for a County Court Judgement (CCJ) from which you can then get a Charging Order granted on the property. In that case, a Charging Order must be in place before the IVA was granted. Otherwise, you will not be able to get a Charging Order against the debtor.  For more information, please with our article on the differences between a CCJ and an IVA.


Do creditors have to accept an IVA?


A creditor has a choice to accept or reject an IVA. In most cases, creditors should accept an IVA, if the offer of payment is reasonable. A couple of reasons for why a creditor may reject a proposal are:

  • Using an untrustworthy IP
  • Creditors could get more if debtor went bankrupt
  • Debtor lied about their income or expenditure
  • Proposal formatted wrong

The IP will present a proposal to the creditors on the behalf of the debtor. In most cases, it is very likely that creditors will accept an IVA. Please note, for an IVA to be accepted, over 75% of the creditors based on their value must agree to it.

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