Where the debtor suffers a reduction in disposable income during the life of the IVA, the supervisor may exercise his or her discretion to reduce monthly contributions by up to 15%, provided this is clearly stated in the terms of the original IVA proposal and provided the reduction in disposable income is verified. If this discretion is exercised, creditors are informed of the decision in the first annual report following the reduction in contributions.
If creditors have modified the IVA proposal requiring a minimum dividend to be paid the supervisor may extend the term of the IVA by up to six months in order to realize the minimum dividend and if necessary may extend the term by a further three months. These decisions and actions do not require the supervisor to call a variation Meeting of Creditors but are communicated to creditors via an Extension of IVA Term notice to creditors.
If no minimum dividend modification is made by creditors, the supervisor reports the successful completion of the IVA at the end of the proposed term, even where the estimated dividend has not been achieved.
Where the debtor’s reduction in disposable income is greater than 15%, the supervisor will, if deemed appropriate, convene a Meeting of Creditors to request approval of a reduction in payments.