What does an IVA cost?

We consider the cost of doing an individual voluntary arrangement and how these costs are paid.

The first thing to understand about individual voluntary arrangements is that the costs involved with providing the IVA service are included within your monthly payments.

Because your monthly IVA payments are equal to the amount you can afford to pay each month and no more, you do not pay anything extra to cover the cost of IVA service.

After you have completed your IVA payments which normally last for five years, any unsecured debts left unpaid will be written off and you have nothing more to pay.

Despite the fact that you do not pay anything extra to cover the cost of your IVA, it is still useful to understand the costs involved with the IVA service and how they are collected by the insolvency practitioner.

IVA nominee fee

The IVA nominee fee is a standard cost which is deducted from the first four or five IVA payments that you make.

It is to cover the cost involved with putting your IVA proposal together and presenting it to your creditors.

The nominee fee is paid to the insolvency practitioner who you are working with.

For protocol individual voluntary arrangements which cover almost all standard IVAs, the nominee fees are fixed by your creditors and will be the same whichever insolvency practitioner you chose to work with.

For this reason you do not have to worry about one insolvency practitioner charging more than another and making it more or less likely that your creditors will accept your IVA. The nominee fee charges are almost always the same.

IVA supervisor fees

The IVA supervisor fees are ongoing IVA costs which are deducted from your payment each year.

IVA supervisor fees are charged to individual voluntary arrangements to pay for the ongoing running costs of the IVA service.

The supervisor fees are paid to the insolvency practitioner who is managing your IVA.

As with the nominee fee, for standard protocol IVAs the supervisor fees are fixed by the creditors and standard across all insolvency practitioners.

They are normally equal to 15% of the money that is returned to your creditors.

IVA instruction and drafting fees

If you decide that an individual voluntary arrangement is right for you, you should not be asked to pay any IVA service costs directly yourself.

The cost of an IVA is entirely included in the agreed monthly payments that you make.

Despite this some IVA companies charge an extra fee which they call an instruction fee or drafting fee.

There is really no need to pay such a fee and it can rarely be justified.

Most good insolvency practitioners will not ask you to pay any type of fee upfront and will ask you to simply start making you agreed monthly IVA payments when your IVA is accepted by your creditors.

Cost of IVA standard

Understanding the cost involved with implementing and running a debt management solution is an important part of deciding which to use.

As with other debt management solutions there are costs involved in providing the IVA service. However the important thing to remember is that the cost of an IVA is simply deducted from the monthly payment that you make.

This means that you will never have to pay any more to cover the cost of the IVA service.

In addition to this, for most standard IVAs the fees which are deducted are the same no matter which IVA company or insolvency practitioner you chose to use.

There is therefore no need to worry about whether an insolvency practitioner will be more or less likely to be able to get your IVA accepted by your creditors due to the fees that they charge. The cost of providing a protocol IVA service is standard across all insolvency practitioners.






James Falla is a debt management solutions expert and author. He has fourteen years of experience of implementing individual voluntary arrangements for people who are struggling with personal debt.

In 2004 James co founded Thomas Charles a specialist debt management solutions company where he personally helped over 1000 clients implement individual voluntary arrangements. James is now the managing director of and senior debt advisor for Wilmott Turner Financial Services which operates debt solution websites such as http://www.beatmydebt.com/.