How Much Does an IVA Cost?
If you’re exploring the option of an Individual Voluntary Arrangement (IVA) to manage your debts, understanding any associated costs is essential to help you make an informed decision. The good news is that IVAs are designed to be affordable and manageable, with no upfront costs in most cases, and any fees are spread out throughout the agreement.
In this blog, we’ll break down any costs involved in an IVA, so you can see how it works and whether it’s a viable option for you.
Initial Assessment – Free of Charge
One of the best parts about starting the IVA process is that the initial assessment is typically free. At Stop My Debts, we offer a no-obligation, free consultation to assess your financial situation and determine whether an IVA is the right solution for you. You won’t have to worry about any upfront costs or charges for information—everything is explained clearly without any pressure or hidden fees.
Working with an Insolvency Practitioner
To get an IVA approved, you must work with a licensed Insolvency Practitioner (IP). This person will be in charge of preparing your IVA proposal, presenting it to your creditors, and supervising your IVA throughout the duration of the agreement, typically five years. They ensure that everything is done according to legal requirements and that your IVA runs smoothly.
Practitioner Fees – What You Need to Know
While the Insolvency Practitioner plays a crucial role in managing your IVA, it’s important to understand that they charge fees for their services. These fees are typically known as the nominee fee and supervisory fee.
- Nominee Fee: This fee covers the work that the Insolvency Practitioner does to prepare your IVA proposal and submit it to your creditors.
- Supervisory Fee: This fee covers the ongoing management and supervision of your IVA throughout its five-year term.
These fees are usually fixed and set by the Insolvency Practitioner. While they can vary slightly depending on the practitioner, they are typically in the range of £2,000 to £3,000 for the full IVA term.
Fees Are Included in Your Monthly Payment
Here’s where it gets important: The fees for the Insolvency Practitioner are included in your affordable monthly IVA payments. This means that you don’t have to pay anything extra on top of the amount that’s been agreed upon in your IVA proposal.
Your monthly IVA payment is determined based on what you can afford to pay after taking into account your income and essential living expenses. The nominee and supervisory fees are deducted from these monthly payments, along with what is going toward your debt repayments.
Since these fees are spread out over the term of the IVA, you never have to pay anything upfront, and they don’t come out of your pocket separately. They are simply part of your agreed-upon monthly payment, which has already been assessed and approved by your creditors.
The Big Benefit – Debt Written Off at the End
One of the most attractive features of an IVA is that, at the end of the five-year term, any remaining unsecured debt that hasn’t been paid off through your monthly payments will be legally written off by your creditors.
This means that the fees involved in setting up and managing the IVA won’t affect your ability to reach a debt-free future. You will have made regular, affordable payments throughout the term, and whatever is left will be cleared by the creditors once the agreement is complete.
No Upfront Costs, One Affordable Payment
To sum up the costs involved in an IVA:
- No upfront costs for information or the initial consultation. You’ll never be asked to pay anything out of pocket to get started.
- Fees for the Insolvency Practitioner (nominee and supervisory fees) are included in your affordable monthly payment. These fees are spread out over the term of the IVA, meaning they don’t cost you anything extra on top of what you can afford to pay.
- One manageable monthly payment is agreed upon by you and your creditors, which covers both the IVA fees and your debt repayment.
- Remaining debt is legally written off at the end of the IVA term, so you can move forward without the burden of unpaid debts.
This means that you don’t need to worry about paying extra fees along the way, and your monthly payments remain fixed and affordable.
Throughout the term of the IVA, you can focus on managing your finances without the stress of constantly negotiating with creditors.
Get Expert Guidance with Stop My Debts
At Stop My Debts, we believe in making the IVA process as simple and stress-free as possible. If you’re curious about how much an IVA would cost in your specific situation, don’t hesitate to reach out.
One of our experienced advisors can walk you through the process, explain any costs involved, and help you determine whether an IVA is the right solution for you.
Contact us today for a free consultation. We’re here to provide clear, straightforward advice and guide you through the steps toward a debt-free future. Let’s get started today!