The short answer
Since the Insolvency Rules 2016 came into force in April 2017, physical creditors’ meetings are no longer the default. Decisions — such as approving a liquidator or their fees — are now made by deemed consent or by a decision procedure such as correspondence or a virtual meeting. Under deemed consent, a proposal passes unless creditors holding at least 10% by value object. Creditors can still force a physical meeting if enough of them request one.
How creditors approve decisions in an insolvency changed significantly under the Insolvency (England and Wales) Rules 2016, which took effect in April 2017. Physical meetings stopped being the automatic starting point, replaced by faster, lower-cost methods including deemed consent and virtual decision procedures. This guide explains how each method works and when creditors can still demand a meeting.
Creditors’ decisions at a glance
- Governed by The Insolvency (England and Wales) Rules 2016
- In force since 6 April 2017
- Physical meetings No longer the default
- Deemed consent Passes unless 10% by value object
- Decision procedures Correspondence or virtual meeting
- Force a meeting 10% by value, or 10 creditors, or 10% by number
What changed in 2017
The Insolvency (England and Wales) Rules 2016 modernised how creditors are consulted. Before April 2017, a physical creditors’ meeting was the standard way to make decisions such as appointing or confirming a liquidator. The Rules removed the physical meeting as the default and introduced quicker, cheaper alternatives, reflecting that most creditors never attended meetings in person. The aim was to cut cost and delay in insolvencies while preserving creditors’ ability to have a say where they want one.
This affects nearly every formal procedure — liquidations, administrations and company voluntary arrangements all rely on the same decision-making framework when creditors need to approve something. So whether you are a director watching the process unfold or a creditor wondering how to make your voice heard, the same set of methods applies. See creditors’ voluntary liquidation for where this fits in a typical company closure.
Deemed consent
Deemed consent is the simplest method. The office-holder sets out a proposed decision and a date. The proposal is treated as approved unless creditors representing at least 10% of the total debt object by the deadline. If that threshold of objections is reached, deemed consent fails and the matter must instead go to a formal decision procedure. The logic is practical: if no one with a meaningful stake objects, there is no point convening a vote at all. Deemed consent cannot, however, be used for certain decisions — most importantly approving an office-holder’s remuneration, which always requires a positive vote so that creditors actively sanction what the practitioner is paid.
Decision procedures
- Correspondence — creditors vote in writing (including electronically) by a stated deadline. This is now the most common method.
- Virtual meeting — creditors join by telephone or online conferencing rather than attending in person.
- Electronic voting — a secure online voting system, where used.
- Physical meeting — still available, but only where one is required or properly requested.
| Method | How it works | Typical use |
|---|---|---|
| Deemed consent | Passes unless 10% by value object | Confirming the liquidator |
| Correspondence | Written or electronic votes by a deadline | Most routine decisions |
| Virtual meeting | Phone or online attendance | Where discussion is wanted |
| Physical meeting | In-person, only if required or requested | Contentious or complex cases |
Can creditors still demand a physical meeting?
Yes. Creditors retain the right to request a physical meeting. A meeting must be held if it is requested by creditors representing at least 10% in value of the company’s creditors, or by 10% in number, or by 10 individual creditors. This safeguard means the move away from default meetings did not remove creditors’ ability to be heard in person — it simply stopped meetings being convened automatically when nobody actually wanted one. If you are a creditor with a real concern, the practical step is to respond to the office-holder’s notice promptly and, if you want a meeting, to coordinate with other creditors so the request crosses one of the thresholds.
What creditors are asked to decide
Typical decisions put to creditors include confirming the choice of liquidator, approving the basis and amount of the office-holder’s fees, forming a creditors’ committee, and approving proposals in an administration or CVA. In each case the office-holder must give creditors enough information to make an informed choice — a statement of affairs, an estimate of likely returns, and the practitioner’s report. Creditors who engage with this material have real influence over how the case is run; those who ignore the notices effectively delegate the decision to everyone else.
Where this fits in a liquidation
In a creditors’ voluntary liquidation, the shareholders resolve to wind up and nominate a liquidator, and the creditors then confirm the appointment through one of these decision procedures — most often deemed consent or correspondence. The same machinery is used later in the case to approve the liquidator’s fees or to set up a creditors’ committee. Note that a compulsory liquidation, which follows a winding-up petition and a court order, starts differently — there the court appoints the Official Receiver first — but creditors are still consulted through these decision procedures when an insolvency practitioner is later appointed. See creditors’ voluntary liquidation for how the whole voluntary process fits together.
Unsure how the creditors’ decision affects you?
Whether you are a director or a creditor, a licensed insolvency practitioner can explain how the decision process applies to your case. A short call clears it up.
Frequently asked questions
What is deemed consent?
Deemed consent is a decision method where a proposal is treated as approved unless creditors holding at least 10% of the total debt object by the stated deadline. It avoids the need for a meeting or vote where there is no opposition.
Are physical creditors’ meetings abolished?
Not entirely — they are no longer the default since April 2017, but creditors can still require one if enough of them request it (10% by value, 10% by number, or 10 creditors).
Can deemed consent be used for everything?
No. Certain decisions, such as approving an office-holder’s remuneration, cannot be made by deemed consent and must use a formal decision procedure instead.
How do creditors vote by correspondence?
Creditors submit their votes in writing or electronically by the deadline set by the office-holder, along with proof of their claim. The result is decided by the required majority of those who vote.
Sources & further reading
- The Insolvency (England and Wales) Rules 2016
- The Insolvency Service — guidance for creditors
- GOV.UK — creditors’ rights in insolvency
- Insolvency Act 1986 — decision-making provisions
This guide is general information, not formal insolvency advice. Your situation must be assessed by a licensed insolvency practitioner before you act.