As soon as you decide to proceed with an IVA then your payments to creditors end and contributions towards your IVA start. The amount you pay will be set at a figure which you have agreed you can afford.
The Insolvency Practitioner will charge fees for its role as the nominee and as the supervisor and a separate fee is payable for the Insolvency Practitioner’s work in each of these roles. Charges will also be made for additional expenses.
How the IVA fees work
The nominee fee is a fixed fee depending on the complexity of the IVA but typically is between £1,000 and £2,000. This is for the pre-appointment work in setting up your proposal to your creditors.
The supervisory fees are normally capped by creditors at between 15 and 20% of realisations and are drawn monthly from the monthly contributions. This is for post-appointment work in maintaining your IVA until the IVA is concluded.
It takes around 6 – 8 weeks to set up an IVA and during this period you will commence your monthly contributions into your IVA. It is likely that by the time the IVA is approved, you will have made one to two contributions which will be used as part payment of the Nominees fees.
(If creditors reject the IVA proposals we do not seek to recover the balance of the Nominee’s fee from you). All fees will be discussed in detail with you prior to any plan being put in place.
Please note that any charges for progression of an IVA are approved up front with yourself and your creditors. Missed payments can bring your IVA to an end which may result in bankruptcy. Should your IVA fail, you’ll remain liable for the balance of your debt and any fees incurred by The Insolvency Practitioner and your home may also be at risk.