IVA

IVA - Fees

Fees incurred for Individual Voluntary Arrangements are variable dependent upon the monthly contribution to the arrangement and the agreement that is reached with your creditors. Fees are made up of Nominees fees relating to assistance given to prepare your proposal and Supervisor fees which relate to the ongoing monitoring of your IVA. Fees are already included as part of your monthly contribution. The level of fees and the method of payment are both agreed by your creditors at the outset of the arrangement.

Nominees fee

This is a fixed fee that will cover the work that goes into setting up your IVA:

  • Creating your IVA proposal. This is the document which must be approved by enough of your creditors for your IVA to start. It defines the proposed terms of the IVA: how much you would pay, what each creditor would receive, etc.
  • Setting up the creditors meeting. This is when your creditors will formally approve your IVA proposal, reject it, or request changes to it.
  • Assessing any suggested changes. If any creditors have requested changes to your IVA proposal, your IP will advise you on whether you should accept those changes - or consider a different approach to your debt problems.
  • Your first few monthly payments (depending on what you have agreed with your creditors) will go towards paying the nominees fee before your creditors receive any money - so your accounts will go into arrears - or further into arrears - because your first two monthly payments will not go to your creditors.

Supervisors fees

The supervisors fees will cover the ongoing supervision and maintenance of your IVA all the way through - so for five years, with a typical IVA. That means:

  • Your Relationship Manager will deal with any day-to-day issues that arise, ensuring your IVA runs smoothly.
  • Your IP will carry out regular reviews of your IVA and address any more serious issues that come up - if, for instance, your financial situation worsens, and you need your IP to arrange an IVA variation (a legally binding change to the terms of your IVA, designed to help you bring the IVA to a successful conclusion).
  • After the nominees fee has been paid, a percentage of each monthly payment will be taken as supervisors fees, as detailed in your IVA proposal.
  • Note: Keeping up with your monthly payments in an IVA is vital - if you fail to, your IVA may fail, leaving you liable for the remaining balance and any costs already incurred. Having said that, IVAs do provide an element of flexibility: you may, for example, be allowed to take a small break from your payments if you come up against unexpected costs (such as essential home repairs).
  • Our IVAs are provided by various insolvency practitioners that are suitable to your current circumstances.


IVA Example

At this point, we must point out again that an IVA is very much an individual arrangement and that no two are the same. This is just an example aimed to help you understand how they work.

There are two kinds of fee involved in an IVA - the Nominees fee and the Supervisors fees. Here is an example of the fees and payments on a typical clients IVA:

Typical monthly repayments (60 months)

£300

Total paid by borrower (including fees)

£18,000

Total unsecured debt written off on completion

£13,000 (42%)

Nominees fee

£1,704

Supervisors fees

£3149

Supervisors costs

£290

Example based on a typical client, with approx. £31,000 of unsecured debts who completes a 5-year IVA and has no equity in any property.

As a formal insolvency procedure, an IVA is a legally binding agreement with your unsecured creditors and requires an Insolvency Practitioner (known as an IP).

An IP is a qualified professional with the experience to handle insolvency cases. They will be responsible for ensuring your IVA is fair to both you and your creditors all the way through