How much does an IVA cost

There is a cost if you do an IVA. However you do not pay this directly yourself. Money comes out of the payments you make to cover the fees. You do not have to pay anything extra each month to cover these.

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What is the cost of doing an IVA?

Someone called an Insolvency Practitioner (IP) will negotiate and implement your IVA. They charge fees for the work they do. These are Nominee and Supervisor fees.

Once your IVA is in place, the IP will deduct money from your monthly payment to cover these fees.

IVA Nominee Fee

The Nominee fee covers the cost of drafting your IVA proposal and agreeing it with your creditors. It will normally be around £1500 (although could be more in certain circumstances).

IVA Supervisor Fee

The Supervisor fee covers the cost of managing your IVA while it is in place. Your IVA company will usually take this money once a year at a rate of 15% of what you pay into the Arrangement.

Your IVA company can only take their fees when your creditors accept the IVA. If they don’t accept, there is no charge.

How do you pay the IVA cost?

You don’t have to pay the cost of your IVA yourself. Your IVA company will deduct the fees they charge from your agreed monthly payments.

It is important to understand that you do not have to pay anything extra to cover your IVA fees. They come out of your normal payments.

As a result, not all of the money you pay into the Arrangement goes towards your debts. However the organisations owed money (the creditors) understand this. It is made clear to them in your proposal. They agree with the costs up front.

You might be concerned that your creditors will reject your IVA when they discover some of your payments will be taken in fees. There is no need to worry.

The creditors understand that there are costs associated with running the IVA. They agree that these should be recovered from the payments you make.

Do you have pay anything up front to get an IVA?

You will not have to make any upfront payments if you are start an IVA. The IVA company you work with should carry out all the initial work without requiring any payment.

Your IVA company can only recover the cost of setting up the Arrangement if it is agreed by your creditors. If the creditors reject, they will not be paid.

For this reason it is unlikely that an IP will propose an IVA on your behalf unless they are confident it will be accepted.

Think twice if your IVA company asks you to pay anything upfront before your IVA is in place. Most reputable companies do not charge anything before the Arrangement is accepted.

We do not charge you anything up front to implement an IVA. Get in touch for advice and assistance.

What happens to IVA fees already paid if you cancel your IVA?

You may decide to cancel your IVA after it has started and use a different debt solution to manage your remaining debts. There are different reason why you might choose to do this.

• Your circumstances might change. As a result, you can no longer afford to maintain the monthly payments. Alternatively you can now afford to pay off your debt yourself.
• Perhaps you forgot to include a debt in your IVA or it comes to light afterwards.
• You decide that an IVA was not the right solution for you in the first place.
• You simply want to cancel and switch to a different solution.

Where you do stop your IVA part way through, not all of the money you have already paid in will go to towards your debts. Your IVA company can deduct an amount to cover the cost they have incurred.

Does the cost of an IVA vary between different companies?

The fees charged by different IVA companies have become standardised. This is largely due to pressure from creditors. As such the amount they deduct from your payments to cover their cost should be very similar.

This is good news because it means you do not have to waste time comparing the cost of different companies. In addition there is no worry about your IVA not being accepted because your IVA company charges a higher fee than someone else.

The only time when the fees for an IVA can increase is if you are self employed or your circumstances are particularly complex for another reason. In these circumstances there is more cost involved with both implementing and supervising the Arrangement. The creditors recognise this and allow higher amounts to be charged.

Each IVA company charges very similar amounts. You do not have to shop around to find the cheapest.