Fees
If you choose to enter into an Individual Voluntary Arrangement (IVA), there will be fees involved. The level of any fees taken will be decided by your creditors. The costs in relation to your IVA may also be claimed back.
You will only be charged a fee if your IVA is accepted.
All costs are built into your monthly payment.
Once your IVA has been accepted, the fees you pay will be:
- A Nominee’s fee
- Supervisor’s fees
- Costs and expenses
Nominee’s fee
A licensed insolvency practitioner must act as Nominee of an IVA. This fee covers the professional costs involved in arranging your IVA, including:
- Preparing your IVA proposal – which sets out the proposed terms of your IVA and provides your lenders with a detailed snapshot of your finances, and
- Arranging the creditors meeting.
It will typically be between £1,000 and £3,000 and is often capped to an amount equal to your first 4-6 months IVA payments.
The Nominee’s fee will often be paid first, before any payments are made to your creditors.
Supervisor’s fees
The Supervisor’s fees cover the ongoing work involved in running your IVA. It will usually be calculated as either a fixed amount, a percentage of the realisations (payments) received into your IVA, or a combination of both.
It is typically charged at 15-18% of any money received by the Supervisor, such as your monthly contributions and any assets and windfalls (e.g. the equity in your property, successful PPI mis-selling claims and an inheritance that you receive during the term of your IVA), or £1,750 plus 15% of any funds received other than the monthly contributions.
Disbursements/Costs
Disbursements are payments made to third parties to cover essentials such as the cost of registering the IVA with the Insolvency Service and the insurance (bond), which is a legal requirement.
How much you will pay in fees will be clearly set out in your IVA proposal. They must be approved by your creditors and may be changed before the proposal is accepted.
