What will an IVA cost?

Looking at your options - costs of an IVA

We receive a lot of calls and emails from the public asking; "What will an IVA cost?".

Please note that for consumers considering an Individual Voluntary Arrangement (IVA); that the licensed insolvency practitioner’s clients are referred or forwarded to by Money Advice Direct for an IVA to process, charge a nominee, supervisor and initial administration fee. This fee structure covers the payments consumers make as well as the Licensed Insolvency Practitioner's fee for preparing, nominating and supervising the IVA. At the outset of the contract or service for an IVA the nominee fee is combined with the supervisory.

Please note that there is also an initial administration fee. Please note that if the IVA fails then the client will be entitled to a refund of the initial administration fee. This IVA fee structure ultimately means there are no extra fees requested apart from the initial administration fee, nominee’s fee and supervisor’s fee.

Please beware of other commercial debt advice providers being unclear on their charges. Please note that if a fee is payable at any stage (including nominee/upfront and supervisory/administration fees) this information should be stated prominently in the advertisement, on any website and in any promotional material.

Please note that were consumers are referred for debt management plans these services attract a fee. Finally, please note that your home may be repossessed if you do not keep up with repayments on a mortgage or secured loan.

The IVA fees charged by the insolvency practitioner are illustrated clearly in the IVA proposal and are based on; the amount of unsecured debt owed and the amount that is repaid into the IVA The following is breakdown of typical payments and fees on an IVA for someone owing £30,000 in unsecured debts and paying £300 per month into an IVA; Initial administration fee: £300, Nominees Fee: £1,275, Supervisors Fee:(over 60 months): £45 per month, Expenses: £290 and IVA failure fees: If an IVA fails then the debtor has to pay back the rest of the debts and any IVA costs outstanding.

An IVA is set up by a licensed insolvency practitioner. The IP incurs costs when setting up and running an IVA. The cost is related to the time taken to do the following:

IVA proposal
Nominee's report
Posting the IVA proposal to the creditors.
Holding the IVA creditors meeting

The whole IVA process will be carried out on your behalf by a Licensed Insolvency Practitioner (IP) who is in ultimately in charge of the IVA.

FACT - Who pays for the real cost of an IVA?

The person who pays the cost for an IVA is the person in debt and the creditors. The IVA cost is taken from the money paid and taken from the funds before the money is sent to the creditors.

An IVA is based on affordability. This point is important to note as it means there is no point shopping around for the best IVA deal. The person who pays the IVA cost is the creditors, who accept less money because they pay the IP to manage the IVA on their behalf.

During the period of the IVA the monthly payments will go towards the IVA dividends in IVA client account. The money in the IVA client account will be handed over to the creditors at agreed regular IVA payments times. At the conclusion the of the IVA term all outstanding IVA debts are wiped out. This IVA money is banked in an IVA client account after by the Licenced Insolvency Practitioner who pays the IVA for you.

Will the IVA cost more if my debts are joint with my husband or spouse?

If there are joint debts are two people living together need to apply for an IVA the costs will be slightly higher. The cost will be higher than a single IVA. It is important to do a joint IVA application at both debtors will need protection.

If you would like further advice on what will an IVA cost please contact the IVA team advisers. The team are highly experienced and are able to empathise with the life changing situations an IVA can bring. To access the service either call 0800 074 6918 or log onto www.insolvencyhelpline.co.uk.

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IVA's

The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.

In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]

What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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What will an IVA cost?

Looking at your options - costs of an IVA

FACT - Who pays for the real cost of an IVA?

Will the IVA cost more if my debts are joint with my husband or spouse?

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