creditors.....guidance sought

[rickyg33]

There's been much talk on this forum about creditor voting on proposed IVA's. Is this done as a percentage of the debt?

For example, 3 creditors owed £5,000, 1 creditor owed £10,000.
First 3 creditors have 20% each [5k as a % of 25k], last creditor has 40%.

Any current view on these, regarding hurdle rates [HSBC are 40% I believe]:

mint
HSBC [40% at the moment I understand]
tesco
Lloyds TSB
capital one
marbles
egg
cahoot

Thanks,

rickyg

[carlmcmullen]

HSBC require 40p in £

The remainder are best offer, but at the moment i am seeing egg constantley pushing for increases regardless if the expenditures are within the guidelines. (but if they are less than 25% you dont have to accept there vote)

[Adam Davies]

Hi
HSBC are the only creditor with a known hurdle rate
It all depends on how many creditors vote on the day regarding acceptance.You need creditors owed 75% or more of the total debt that vote on the day to agree.
So in your example if all voted and one of the 5k creditors said no then it would be accepted[80%]but if the 10k creditor voted no then your IVA would be rejected as the 10k creditor hold 40% of your total debts and can't be out voted
Regards

[elizabethr]

I'm sure I've asked this one before but I am confused - if one of my creditors has approx 33% share of my debts and they voted no would that mean an IVA would not be accepted.

[rickyg33]

if any creditor doesn't vote, is that taken as a 'yes' or a 'no' vote?

is it down to the one's that vote, not the ones that can vote?

what I'm trying to work out is if there are 5 equal creditors, say, and only 3 vote, then is the decision based only on the 3 that voted, and ignoring the 2 that didn't?

[carlmcmullen]

elizabethr, yes if TIX have 33% vote and reject then your IVA wont be approved. But TIX very rarely reject proposal they normally accept with modifications (Increased Dividends)

Ricky, It is very hard to explain creditor voting but here goes.

It is down to the creditors that vote, so if you have £100,000 and for example a store card with £250 on it, nobody voted at your meeting other than the store card then it is 100% acceptance. You must have one creditor to vote in favour to have it accepted, and all other creditors are still bound even though they didnt vote.

If you have £100,000 and £80,000 in value vote yes and £10,000 say no then you still have 91% of the creditors who voted(in value) said yes so it is approved. (and the other £10,000 who didnt bother to vote are still bound)

[Adam Davies]

Hi
Just to add to Carls excellent explanation a 'non' vote is classed as neither a yes or a no vote.The only votes that count are the ones made at he meeting so,as Carl states,it is quite possible to have 100k of debt and only one creditor voting on the day,if this is a yes vote then your IVA is agreed