If you enter into an IVA, there will be fees involved. The level of any fees taken will be decided by your creditors and any genuine costs in relation to your IVA may also be claimed back.
Individual Voluntary Arrangement fees
You will only be charged a fee if your Individual Voluntary Arrangement (IVA) is proposed and accepted by your creditors.
All fees are paid out of - not in addition to - your regular affordable monthly payments.
Once your IVA has been accepted, the fees you pay will be:
- A nominee's fees
- Supervisor's fees
- Costs and expenses
This fee covers the professional costs and charges involved in arranging your IVA, including:
- preparing your IVA proposal - which sets out the proposed terms of your IVA and provides your lenders with a detailed snapshot of your finances, and
- organising the creditors' meeting, in which lenders can request changes to the terms of your IVA.
It will typically be between £1,000 and £3,000 and is often capped to an amount equal to your first 4-6 months' IVA payments.
The Nominee's fee will be paid first before any payments are made to your lenders.
The Supervisor's fees cover the ongoing work involved in running your IVA and is calculated as a percentage of "realisations": typically it is charged at 15-18% of any money received by the Supervisor and distributed to your lenders, such as your monthly contributions, any assets (e.g. the equity in your property, successful PPI mis-selling claims) and windfalls (e.g. an inheritance) that you receive during the term of your IVA.
There might also be costs incurred directly in connection with the running of your IVA, such as postage and insurance, which your IVA provider is entitled to claim back.
How much you will pay in fees will be clearly set out in your IVA proposal. They must be approved by your lenders and may be changed before the proposal is accepted.