There are no “free” IVAs
All IVA providers charge fees in a similar way, and the level of fees is set by your creditors. If you see a service being described as “free”, either:
It’s a lead generator
One company is passing your details to another, so you aren’t charged for the introduction. That’s the “free” part.
It’s a debt management plan
In a DMP 100% of the included debts are repayable and some providers do not charge their clients – the creditors pay. An IVA is different: often a large part of the debt doesn’t need to be repaid.
How IVA fees are paid
Fees come out of your payments, not on top of them
There are two fees. They don’t change your monthly payment: they are taken from the money you pay into the IVA, which reduces the amount each creditor receives. The amounts vary case by case, depending on the work involved and your creditors’ wishes.
Nominee’s fee
What is it?
Covers the work up to the point your IVA is agreed: looking into your circumstances, valuing your assets, drafting your proposal, and arranging and holding the creditors’ meeting.
When is it paid?
From your monthly payments, at the start of your arrangement. It is always included in the IVA and is never an extra charge.
How much is it?
Your creditors agree the fee at the creditors’ meeting. In most cases it is taken as a percentage of your monthly payments.
Supervisor’s fee
What is it?
Covers the ongoing work of running your IVA: dealing with your creditors, making dividend payments to them, and producing regular reports for you and your creditors.
When is it paid?
From the money you pay into the IVA, when your creditors allow, typically monthly, quarterly or annually. It is included in the IVA and is never an extra charge.
How much is it?
Set and agreed by your creditors, and taken from your payments rather than added to them. It is generally 15% of your total payments, and will be clearly stated in your proposal.
Fees example
In this example, someone owing £28,000 can afford to offer £220 a month to their creditors.
Total paid by you
£13,200
£220 × 60 months
Paid to your creditors
£10,180
after fees and costs
Debt written off
£14,800
53% on completion
Where your £13,200 goes
Paid to creditors Supervisor’s fee Nominee’s fee Costs
| A typical IVA | Amount |
|---|---|
| Monthly payment (for 60 months) | £220 |
| Total paid by you (fees included) | £13,200 |
| less Nominee’s fee | −£1,100 |
| less Supervisor’s fee | −£1,850 |
| less Supervisor’s costs* | −£70 |
| Paid to your creditors | £10,180 |
| Debt written off on completion | £14,800 (53%) |
* Average costs, based on registration and insurance.
Refunds: once your IVA is up and running, money paid into it cannot be refunded.