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Can associate creditors vote on an IVA proposal even if they are prepared to wait until the IVA is finished before they get paid? In this, way the IVA would get the 75% in favour vote required but the non associate creditors would not lose out in the distributions of money during the IVA

Hi
Yes,they are included for voting purposes but left out for dividend purposes.They may have an important role to play in securing the 75% yes vote.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

If you can show that you owe money to an associated creditor then yes they can be included for voting purposes but are unlikely to recieve a dividend during the IVA.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

Hi Andy,

Thanks for your reply. The reason behind my question was that I declared all of my debts including associate creditors in my initial applivation for an IVA, but the Company I used would not include them on the basis that it would reduce the dividend to the other creditors and they would probably vote against the proposal.

I informed Debt Free Direct that without those associate creditors HSBC would control 26% of the total debt and could therefore reject my proposal of 25%. The IP still would not include them in the proposal suggesting that they could persuade HSBC to accept 25%. Not surprisingly the IVA proposal was voted against by HSBC who insist on 40%. So now the IVA has failed.

When I got the report back of voting I also discovered that several creditors on the 'yes' side of the vote had their debts recorded incorrectly downgrading their debt by over 20K. This falsely appeared to tip the 'No' vote substantially!

What can I do now?

Hi
What a strange story,I suggest getting a second opinion from another company and would suggest using a company on this forum.
All creditors should be included and I can't understand why they were not.Also HSBC are universally known to have a 40p hurdle rate so your proposal seemed doomed from the start.
Another IP could propose a new IVA.
Regards

Andy Davie
IVA.co.uk Spokesperson

About me:
http://www.iva.co.uk/andy_davie_profile.asp

IVA Helpline: 0800 197 4838
http://www.iva.co.uk/iva_helpline.asp

Seek a second opinion on this matter. There is nothing stopping you making a new IVA porposal to your creditors if you decide upon advice that this is the best course of action for you to take.

Best Regards
Oliver

Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at: www.thomascharles.com/about_us.asp

This is very poor advice. Associate creditors should be included in IVA proposals. You can always discount them for dividend purposes, if there is a need to offer a higher dividend to the other creditors, but to exclude them is to make a false declaration of your liabilities which is an offence!

There are two different stages of voting for IVAs which include associated debts. Firstly - the usual 75% vote is taken, then a second vote is taken excluding the associated creditor votes at which a 50% majority must be achieved. This IP has effectively scuppered your chances of an IVA, and I suggest you have something to complain about.



Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

To have me propose an IVA for you, please visit:
http://www.melaniegiles.com/ivaEnquiry.asp

See customer feedback at:
http://www.iva.com/iva_companies/IVA_Advice_Bureau.asp