You will only be charged fees if your IVA is approved by your creditors and our fees are only taken from your monthly payments or any asset realisations paid into your arrangement.
We also offer, as part of your proposal, to start distributing a percentage of the payments made by you from month 3 of your arrangement or in some cases earlier, which means the balances owed to your creditors are starting to reduce. In some cases, creditors amend the terms of the IVA so that we are not required to make payments to them until the Nominees fees and Disbursements have been repaid.
The fees involved in an IVA are the Nominee’s fee and Supervisor’s fees. These fees are set by the creditors who are included in the IVA and are taken from the monthly payment you make into the IVA. In addition to these fees, there are costs called ‘Disbursements’
A licensed Insolvency Practitioner (IP) must act as Nominee on an IVA. The Nominee’s fee covers the work carried out by the IP in the setting up and preparation of your IVA.
It is a fixed fee and is decided by your creditors included in the IVA.
Typically, the Nominee’s fee will be around £1,000, though the exact amount depends on a number of factors including your disposable income, the terms of the IVA and your creditors.
The Nominee’s fee covers the work and legal costs that goes into setting up your IVA – a process which includes:
• Setting up the creditors meeting. At this meeting, your creditors will decide whether to formally approve your IVA proposal, reject it or make changes to it.
• Assessing any suggested changes. If creditors have requested changes to your IVA proposal, your Insolvency Practitioner will advise you on whether you should accept those changes – or consider a different approach to your debt problems.
A licensed Insolvency Practitioner (IP) must act as Supervisor for the full term of an IVA. The Supervisor’s fee covers the work carried out by the IP acting as Supervisor.
It is a fixed percentage of each monthly payment. This percentage is decided by your creditors included in the IVA and is typically 15-20% of the contributions made towards the IVA, after the Nominee’s fees have been cleared.
This covers the ongoing supervision and maintenance of your IVA up until completion. It covers:
• Dealing with any queries you or your creditors may have
• Collecting and distributing your monthly repayments
• Supervisor’s expenses such as legal and administration costs
• Completing an annual review of your financial circumstances – reporting annually to you and your creditors about the progress of the IVA
• Dealing with the closing formalities
These are costs paid by the IP to third party companies for software licences, insurances, and registrations that are required as part of the arrangement. These may also include payments made for the provision of additional services to provide the best return for your creditors.
Typically, the Disbursements of the arrangement equate to around £1,900 per case.
Below is a typical example of the costs and fees charged in an IVA, where the client has £18,000 worth of unsecured creditors and is making monthly repayments of £150 in the IVA (£9,000 in total over 60 months)*
|The Nominee’s fee||£1,000|
|The Supervisor’s fee**||£1,200|
|The Supervisor’s Disbursements||£1,900|
|Total repaid to unsecured creditors||£4,900|
|Total written off by unsecured creditors||£13,100|
*This example is for illustration purposes only and actual repayment amounts, and debt write off will be dependent on individual financial circumstances.
**15% of further monthly payments once the Nominee’s fee has been satisfied.
Dependant on your creditors’ preference, the IVA may be agreed on a “fixed fee” basis, whereby higher Insolvency Practitioner fees are sanctioned on the agreement however other associated Disbursements are not charged in addition. Typically, this is proposed as a Nominee fee of £1,900 and a Supervisor fee of £1,750 and out of each fee; all Disbursements incurred are paid.