How Much Does An IVA Cost?
Debt Lifeline do not charge any fees for our service. You will never be asked for money upfront. There are fees to set up your IVA listed below, but these are incorporated into your monthly IVA payment, not upfront!
No Upfront Fees!
The most important thing to grasp about an IVA is that you pay no fees upfront. The fees that the Involvenscy Practitioner charges are incorporated into your monthly payment that has been agreed as affordable by you and your practitioner. You wont pay more per month due to the fees, if you can only afford, for example, £150 a month to pay your debt’s then that is how much you will pay. The £150 monthly is then split between your creditors and the Insolvency practitioner for the period of your IVA (usually 5 years). If your IVA is unsuccessful – there are no fees to pay!!! This is why very few fail because an Insolvency practioner will not waste time putting together an IVA application if they think it would be unsuccessful as they get nothing for the time they spent arranging it.
What are the fees for?
The Insolvency Practitioner performs two different roles during the IVA process and there is a specific fee to cover each of these roles. These two fees are known as the Nominee’s Fee and the Supervisor’s Fee.
Before your IVA is approved by creditors your Insolvency Practitioners takes on the role of the Nominee and the fee for this covers.
Draughting your IVA proposal, which must be completed by a licensed Insolvency Practitioner
Collecting creditor claims
Giving notice of and holding of creditor meetings
Assessing any changes to the proposal suggested by your creditors
This fee is chargeable only on acceptance of your IVA. If your IVA is not approved this fee does not fall due.
The Nominee’s fee can typically vary from £1,000 to £2,220 depending on your creditors agreement. This will be drawn over the first year of the arrangement (usually within the first five months).
Once an IVA is accepted the IP role changes from that of a nominee to that of a supervisor.
Their role now is to administer the IVA. Amongst their duties, an IVA supervisor will…
Hold and distribute payments
Deal with any creditor correspondence or concerns (creditors are not allowed to contact the debtor once an IVA has been agreed),
Deal with assets involved in the IVA
Deal with any changes (variations) to the IVA caused by changing circumstances.
The Supervisor fees are never more than a maximum of 18% of all the contributions you make over the period of the IVA, taken monthly, in fulfillment of the supervisory role.