IVA - What are the costs involved?

The two most common questions that people ask are: What are the costs involved in an IVA? And, Who will pay these costs?

This guide has the answers to these questions with a brief description of the IVA process.

IVA Fees

The Insolvency Practitioner you hire will charge fees for initializing, supervising and finalizing your IVA. In his initial charge are typically included this service:

  • Formulating the IVA proposal.
  • Gathering all the required information for the Nominee’s Report and Creditors’ Meeting.
  • Preparing and filing the Nominee's report.
  • Circulating the IVA proposal to the Creditors. o Arranging the Creditors' meeting.

Be cautious about IP firms scams i.e. asking for large upfront payments for their services.

The IP can only charge IVA fees for the services the Debtor and the Creditors have asked him to provide, and IVA fees will be included within the arrangement signed by both the parties.
Some companies offer free work on the basis of “No IVA – No Fee” which certainly is a suitable option.

Luckily these charges are now an industry standard and Creditors and Debtors usually do not have much of a concern.

The fee charged can be divided into two subcategories according to the role of the Insolvency Practitioner.

IVA Nominee’s Fee

Before the Creditor accepts your IVA, your IP acts as a Nominee and the fee charged during this phase is called Nominee’s Fee.

To cover the work done before the IVA Creditors meeting the Creditors will be normally charged in the region of £1,000 to £1,500. Typically the first 5 monthly IVA payments are taken as the Nominee's fee for the cost of preparing the proposal and arranging the Creditors' meeting.

IVA Supervisor’s Fee

Once you get 75% of the Creditors’ votes and your IVA is accepted, your IP starts acting as a Supervisor of the whole process. The fee charged during this process is called Supervisor’s Fee.

This IVA fee is charged to maintain the IVA throughout the 60 months.

This fee will be dependent on the amount of work required to be done by the Insolvency Practitioner, but would normally be in the region of £800 per year, yet again paid by the Debtor.

Typically a fee of 15% + VAT of all the money coming in to the IVA is charged as the Supervisor's Fee.

Should the Creditors agree upon the Debtor’s proposal?

Tax and Vat relief can be a charming benefit for the Creditors while accepting the IVA proposal. The Creditors should consider this matter very carefully. They will have more control over the situation if they attend the Creditors’ meeting and investigate the Debtor and IP thoroughly.

If the proposal seems genuine and has more chances of being successful, the offer should be accepted. In this way the Creditors can recover a larger percentage of their amount as compared to Bankruptcy. But if the proposal is ill founded and chances of success seem scarce, a Creditor should either ask for amendments or oppose the arrangement. Later the Creditor can file a petition for Bankruptcy.

What should a Debtor ask about a Nominee and Supervisor?

A Debtor must assess the professional standing of the Nominee before accepting the IVA. The IVA proposal will clarify the expertise of the Nominee to a large extent; however, you may ask questions, if any.

The Debtor should be concerned about the authority of the Supervisor during the IVA process. It has been observed in many cases that Debtors fail to comply with the terms agreed upon. However, if the Supervisor has enough power, he can get the things back on track by taking necessary steps according to the situation.

Is the Debtor protected from any future Bankruptcy?

If there is a petition for Bankruptcy in the Court, it can be suspended by an Interim Order. If the Debtor fails to comply with the terms and conditions agreed upon in the IVA proposal the Creditors can file a petition for Bankruptcy.

It is also possible that the Debtor may obtain loans from new Creditors. IVA is not legally binding on these Creditors and they may file petition a Bankruptcy against the Debtor.

An IVA is a legal binding agreement with its own costs and implications; we advise you to seek professional help before applying.


Fees will apply once your IVA is running. These are deducted from your monthly payment into your IVA.

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