IVA Fees

How much does an IVA cost?

Over the last 2 years the creditors have taken issue with the level of IVA costs that can be drawn by IPs, stating they felt the IVA fees were too high. There has been much said in the press and on forums about how much an IVA costs, with little sympathy being shown to IP’s for the position they find themselves in.

There are 2 main categories that describe the IVA’s costs and they are:

Nominee Fee: To cover the work done before the IVA creditors meeting. This fee will vary on a case by case basis, but typically will be in the region of £1,000 to £1,500. This is called the Nominee Fee.

Supervisor Fee: A monthly administration fee will also be charged to administer the IVA throughout the 60 months. The IP will agree this IVA fee with the creditors and it will vary case by case, but would normally be between £400 to £800 per year. Yet again paid for from the IVA fund. This is called the Supervisor Fee.

Call the debt solutions helpline on: 0845 519 6093

Dont worry these fees are taken out of the IVA you dont have to make any upfront payments.

How are the IVA costs broken down?

An IVA allows you to make repayments to his creditors at an affordable rate for a fixed time-frame . The amount to be paid each month is assessed by one of our IVA Experts before the IVA begins and an IVA is normally completed within 60 months.

An IVA is administered by a licensed individual called an Insolvency Practitioner, also known as an IP, who, to begin with, would put the IVA proposal together and chair a creditors meeting to ensure an agreement was reached.

After this, the IP would supervise the IVA for its full duration in order to make sure the terms of the IVA are being upheld by all parties and then, finally, the IP would bring the IVA to a close by completing the necessary paperwork and notifying the court of the IVA’s successful completion.

Other IP duties would typically include, among other things, the monitoring and collection of IVA contributions and the dispersement of payments to the creditors.

All IVA’s must have a Licensed IP to administer them, and they all charge for carrying out these duties.

The IVA costs will be detailed in the IVA proposal, where the IP highlights to both parties how much he intends to draw as fees for administering the IVA, whilst stating how and when he intends to draw them.

Creditors will negotiate the level of IVAs fees with the IP as part of the Creditors Meeting, essentially setting limits on IVA fees they consider excessive or too high.

The IP takes the agreed IVA fees from the IVA fund. This is the name given to the money paid into the IVA by the applicant.

Who Pays the IVA Costs?

The IVA costs are taken from the IVA applicant’s IVA fund. It is therefore reasonable to say that the IVA’s costs are paid for using the IVA applicant’s money.

However, when looked at more closely, it can be argued specifically in the event of a successfully completed IVA, the actual IVA costs are paid for by the creditors.

Here’s why.

The IVA applicant is only required to pay into the IVA what is deemed affordable and for fixed period, normally 5 years. Whatever is paid into the IVA fund during this period will settle the debt. If there is any debt left unpaid it is written-off.

It is highly unlikely the applicant will have contributed enough money into his IVA fund to be able to repay his debts in full and having the IVA fund reduced by the IVA costs makes it all the less likely. By allowing the IP to draw his costs from the IVA fund, creditors accept it will ultimately reduce the amount of money they recover from the IVA, a point they accept and agree to at the creditors meeting.

So, in the case of a successfully completed IVA the creditors agree to pay all the IVA costs.

However, when an IVA hits problems and fails to complete successfully things change. It is the applicant who is left to cover the IVA costs, for the IVA costs are deducted from the IVA fund in the same way, but there is no debt write-off to speak of. As a result, the applicant remains liable for the original debt levels, which are only reduced by what’s paid over from the IVA fund after the IVA costs have been draw by the IP.

Can debt solutions help me get out of debt?

YES we can. Everyone’s personal situation is different and each debt solution is different so we need to work out which will best suit your financial needs.

We will complete a FREE 20 minute fact find with you to work out what your earning and spending and this will let us know how much you can afford to pay to your creditors and also which debt solution is best for you to help you get out of debt. You are under no obligation but I am sure you will be 100% happy with what out debt advisors can do for you and we have the lowest debt managenent fees in the industy

We pride ourselves in our friendly, professional approach to finding the right debt solution for every one of our clients, which is honest, confidential and always the ‘best advice’ based on your individual circumstances.

If you would like to speak to one of our friendly, professional debt experts about any of our debt solutions you can either call our debt solutions helpline on: 0845 159 6093 or complete our online contact form and one of our debt advisors will call you back within the hour.

Start you debt free life today! with one of our debt solutions.

Debt Management | Individual Voluntary Arrangement | Protected Trust Deed | Bankruptcy

Also have a look at out "DEBT FEEs" chart and see what the more popular debt management companies are charging.