What does an IVA cost?
Published Fri, Sep 23, 2016 Updated Tue, Feb 16, 2021
As with most debt solutions, an IVA comes at a price. It’s very important to consider the costs, fees and charges associated with an IVA, as it can determine whether or not it’s the best option for your financial situation in the long-term.
Do I have to pay for the initial IVA consultation?
This all depends on whether you’ve approached the Insolvency Practitioner (IP) yourself or if you were referred by the court. If it’s the latter then you will need to pay a £335 to the IP. However, this fee is taken from your court deposit.
Insolvency practitioner fees
The IP charges a Nominee Fee and Supervisor Fee. At present, there aren’t any legal guidelines on what an IP should charge, but it’s usually an average of around £5,000. The Nominee Fee is paid to the IP for creating your proposal and the Supervisor Fee is essentially the charge for managing the IVA – including contacting creditors and supervising repayments.
Disbursement fees for IVAs
Disbursement fees are charges incurred by third parties during the terms of your IVA. This covers insurance to protect your repayments, registering the IVA to the Insolvency Service and system maintenance fees. If you have to sell or remortgage your property then the disbursement fees will cover the valuations and land registry costs.
When do I pay my IVA fees?
Most IPs will spread their fees over the terms of your IVA – they’re taken as part of your monthly repayments. A percentage of the money goes to your IP and the remainder goes towards paying back creditors. Some IPs may ask for the fees up-front, so it’s always a good idea to ask!