How much does an IVA cost?
IVA cost and Fees
If you enter into an IVA, regardless of who proposes to your creditors and administers your IVA, there will be fees involved.
The cost and fees involved in an IVA (Individual Voluntary Arrangement) can worry people already struggling with their finances. There are some essential points to remember:
- You will only be charged a fee if your IVA is proposed and accepted by most of your voting creditors.
- The fees do not affect or influence your monthly payment into the IVA.
- Your payment into an IVA is based on your disposable income, which is calculated after assessing your income and expenditure.
- If your IVA is approved, most of your voting creditors have approved the IVA costs deducted from your IVA payments.
- You should never pay a setup fee for an IVA.
How your IVA repayments are calculated
A debt advisor will assess your financial circumstances, which the insolvency practitioner who proposes and administers your IVA must approve. This could be monthly payments, a lump sum, or a combination of both.
Your IVA payment contributions are based on an amount you can afford (Your disposable income), and the creditors will need to agree to it.
Any payments will be paid directly to the insolvency practitioner, who will then distribute the money to your creditors. The insolvency practitioner will retain some to pay their fees.
How much does an IVA Cost?
We recommend our clients to our Insolvency partner Johnson Geddes, and they do not charge any upfront fees for setting up your IVA. Instead, once your IVA has been approved, the IVA cost and fees will be taken from your agreed monthly payments.
The fees will not affect or increase the amount you pay each month. You pay the amount agreed in the IVA proposal, and your Insolvency Practitioner will distribute the funds to cover the fees and your creditor repayments. You would still pay the same monthly amount if there weren’t IVA fees.
What are the fees, and what do they cover?
| Typical IVA cost/fees paid by clients | |
| Nominee’s fees | £1,272.00 |
| Supervisor’s fees | £1,310.00 |
| Supervisor’s costs | £950.00 |
Here are some of the costs associated with an IVA:
- Nominee’s fee: This is a fee charged by the nominee (a licensed insolvency practitioner) for assessing your financial situation and proposing the IVA to your creditors. The fee can range from £500 to £1,500.
- Supervisor’s fee: The supervisor (also a licensed insolvency practitioner) is responsible for administering the IVA and ensuring that payments are made to creditors. The fee is typically a percentage of the payments made under the IVA and can range from 15% to 20%.
IVA Cost – Nominees Fee
The nominee fee is the cost incurred while assisting you when putting together your proposal to creditors. The Nominee (also a Licensed Insolvency Practitioner) will re-confirm your income and expenditure and all the information we collect when submitting your IVA.
They will also consider your assets, discuss with you whether an IVA is right for you, check you meet the criteria and help you put together a proposal that is likely to be accepted by your creditors. An IVA requires a specialist, qualified practitioner to set up the IVA, which is why there is a cost.
The actual fee depends on which practitioner you use and who your creditors are, but it will usually either amount to the value of the first five months of your IVA payments or £1,000, whichever is the greater.
This is how Debt Support Direct is funded; we are paid a fee by the insolvency practitioner for pre-qualifying and collating all the information required at the start of the IVA process.
IVA cost – Supervisors Fee
The Supervisor fee is there to cover the ongoing costs of the IVA and is usually set at 15% of payments into the IVA. This fee is usually paid once the nominee’s price has been paid in full. Your Nominee will become your supervisor once your IVA is approved, and they will be on hand to answer any questions or concerns you may have throughout your IVA.
They will also conduct annual reviews to check your income and expenditure are correct and that you can still afford your monthly payments.
IVA Cost – Disbursements
Disbursements are payments made to third parties involved in your IVA to cover essentials such as the registration fee that comes with being added to the insolvency register.
There is no available legal aid to assist with setting up the IVA, but our Insolvency Practitioner partners do not charge upfront fees. You won’t have to worry about these fees as these will also be deducted from your monthly repayments.
In the unlikely event that you find you can pay the total amount of debt owed at any point throughout your IVA, bear in mind that you will then be liable to pay these fees on top of your outstanding debt.
You can find more information on the advantages and disadvantages of an IVA by clicking here.
Frequently Asked Questions
You must fully understand all the Pros & Cons of entering a debt solution like an IVA. Further down this web page, we have compiled a list of FAQs’.
Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.
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Which Debt Plans apply to you?
We assess your circumstances based on your individual circumstances and will assess for all available debt advice solutions.
Please find below a list of debt solutions we will evaluate for:
- Debt Management Plan (DMP) – Information on a debt management plan
- Individual Voluntary Arrangement (IVA) – Information on an IVA
- Debt Relief Order (DRO) – information on a DRO
- Bankruptcy – information on Bankruptcy
If you have used our online application form, we will contact you to run through your income and outgoings and discuss your options so you can make an informed choice. At Debt Support Direct, we offer all statutory debt solutions in England, Scotland, Wales, and Northern Ireland so that you can choose the debt solution tailored to you and your circumstances.
If you have an attachment of benefits and have chosen the debt solution that you feel is the most appropriate, there will be some paperwork to fill in to put the debt solution programme in place.
Our debt advice is free, non-judgmental, and friendly, so if you are struggling with debt, speak to one of our experienced debt experts for a confidential chat on 0161 549 9848.
Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.
Important Information
Debt Support Direct does not administer any debt solutions; we will assess your debts, circumstances and affordability and signpost you to an organisation or charity that can set up and help the debt plan you decide suits your circumstances.
All debt solutions should be very carefully considered. Some providers may charge fees if a solution is taken; if applicable, these will be outlined during your consultation.
Your ability to obtain further credit in the short term will likely be affected, which may also be the case over the medium to long term. Calls from mobile phones and other networks may be charged to our free phone number.
The Financial Conduct Authority regulates Ruby Holdings Limited, trading as Debt Support Direct. We can offer debt advice for both formal and informal solutions. All debt solutions must be carefully considered, and you must take independent advice.
There are sources of free debt advice and services. You can find out more by contacting the Money Helper on 0800 138 7777 or visiting moneyhelper.org.uk
Here are some links to UK debt charities that can provide help and advice on managing debt:
Please carefully read the information on these websites to understand what services they offer and if they would fit your needs. Reaching out for help as soon as you start having difficulties managing your debts is important. These organisations can help you understand your options and work with you to develop a plan to get back on track.
