Who pays for my IVA?
IVA - Who Pays...?
We receive a lot of calls and emails from the public asking; "Who pays for my IVA?".
Who pays for my IVA?, is actually a very reasonable question, especially as some the IVA adverts on TV, radio and newspapers always quote “FREE ADVICE ” in the IVA adverts. The economic theory, and also the lay opinion, that whatever goods and services are provided, they must be paid for by someone - i.e. you don't get something for nothing - there is such thing as a free lunch!
Please note that for consumers considering an Individual Voluntary Arrangement (IVA); that the licensed insolvency practitioner’s clients are referred or forwarded to by Money Advice Direct for an IVA to process, charge a nominee, supervisor and initial administration fee. This fee structure covers the payments consumers make as well as the Licensed Insolvency Practitioner's fee for preparing, nominating and supervising the IVA.
At the outset of the contract or service for an IVA the nominee fee is combined with the supervisory. Please note that there is also an initial administration fee. Please note that if the IVA fails then the client will be entitled to a refund of the initial administration fee. This IVA fee structure ultimately means there are no extra fees requested apart from the initial administration fee, nominee’s fee and supervisor’s fee. Please beware of other commercial debt advice providers being unclear on their charges. Please note that if a fee is payable at any stage (including nominee/upfront and supervisory/administration fees) this information should be stated prominently in the advertisement, on any website and in any promotional material. .
IVA Fees
IVA fees are highly regulated and are always subject to approval by banks and other creditors. If you are referred to do an IVA via this service all IVA fees will be included within the monthly IVA payment. This IVA fee structure ultimately means there are no extra requested except the nominees fees, supervisors fees and initial administration fee.
The IVA fees charged by the insolvency practitioner are illustrated clearly in the IVA proposal and are based on:
- The mount of unsecured debt owed
- The amount that is repaid into the IVA
The IVA fees charged by the insolvency practitioner are illustrated clearly in the IVA proposal and are based on; the amount of unsecured debt owed and the amount that is repaid into the IVA The following is breakdown of typical payments and fees on an IVA for someone owing £30,000 in unsecured debts and paying £300 per month into an IVA.
Nominees Fee: £1,275
Supervisors Fee: (over 60 months): £45 per month
Expenses: £290
IVA failure fees: If an IVA fails then the debtor has to pay back the rest of the debts and any IVA costs outstanding.
Initial administration fee: £300
FACT - Who pays for my IVA?
The person who pays for my IVA is the person in debt and the creditors. The IVA supervisor and nominee costs are taken from the money paid by the person in debt and taken from the funds before the money is sent to the creditors.
Please note that IVAs are based on affordability. This point is important to note as it means there is no point shopping around for the best IVA deal, so beware of some sales based firms saying they can get you a reduction in your IVA payment.. The person who pays the IVA fees is the debtor and ultimately the creditors, who accept less money because they pay the IP to manage the IVA on their behalf.
During the period of the IVA the monthly payments will go towards the IVA dividends in IVA client account. The money in the IVA client account will be handed over to the creditors at agreed regular IVA payments times. At the conclusion the of the IVA term all outstanding IVA debts are wiped out. This IVA money is banked in an IVA client account after by the Licenced Insolvency Practitioner who pays the IVA for you.
Information for Scottish clients – Who pays more my IVA / Trust deed?
Our Scottish advice team often get asked, Who pays for the costs of setting up and administering the trust deed? The answer is all costs must be met from the estate transferred by the trust deed or from your earnings. (see Who pays for my Protected Trust Deed ? – for more information)
Other Common questions regarding IVA's (Individual Voluntary Arrangement's)
- What is an IVA (Individual Voluntary Arrangement)?
- Who can benefit From An IVA?
- The procedure in brief
- Key components for a successful IVA
- Advantages of an IVA
- Disadvantages of an IVA
If you wish to discuss the Individual Voluntary Arrangement (IVA) procedure and understand how it can help you please complete the following form or telephone freephone 0800 074 6918.
IVA Guide
- What does it mean if my IVA is not approved?
- What are my options if my IVA is not approved?
- My IVA has been approved, what do I do next?
- My IVA has been approved subject to modification – what does this mean?
- How do I make my IVA contributions?
- My IVA proposal included the provision that I had to sell/realise other assets – what do I need to do?
- I am receiving letters and emails from companies offering me a better solution than an IVA - what are these solutions?
- What do I do if my monthly IVA contribution will be late?
- How do I deal with my creditors once I’m in an IVA?
- How do I deal with additional creditors now that the IVA has been approved?
- What happens if I miss an IVA payment?
- The bank has not transferred my IVA payment - what do I do?
- What happens if I do not inform my IVA supervisor that I can’t make the contribution?
- I'm struggling to make the monthly IVA payment what should I do?
- I've received a 'Notice of Breach' from my IVA supervisor - what does this mean?
- What happens if I’ve missed IVA payments or received a notice of breach and there is no solution?
- Is it possible to finish or settle my IVA early?
- How do I settle my IVA early?
- What is the process involved when offering an early IVA settlement?
- Why would I vary the terms of my IVA?
- What does the IVA variation process involve?
- What happens when the IVA variation process has been approved by creditors?
- What happens when the IVA variation process has been rejected by creditors?
- How does an IVA end?
- Will I receive any correspondence when my IVA has completed?
- If one of my debts has been excluded from the IVA, am I liable to pay the debt after the IVA has completed?
- When does a creditor debt claim have to be received by when completing an IVA?
- What happens if any additional debt claims is received during the IVA closure process?
- How do my creditors get their money in an IVA and what are the IVA dividends?
- Does the money in my IVA account earn interest and if so where does that interest go to?
- Do I get a report or certificate stating the IVA has been completed?
- How does an IVA fail?
- What is the effect of IVA failure or an IVA failing?
- What happens after an IVA fails?
- What are the costs of an IVA?
- Who pays for my IVA?
- What is the IVA process?
- Who takes care of my creditors?
- Will an IVA make me debt free?
- How an IVA benefits my creditors
- Lifestyle changes during an IVA
- Advice on living with an IVA
- Will creditors contact me?
- Will I my IVA fail?
- Completing an IVA
- Getting credit after an IVA
- Can an IVA make me debt free?
- How to boost my credit rating after an IVA?
- IVA vs debt management
- IVA vs bankruptcy
- IVA vs debt consolidation
- IVA vs administration orders
- IVA pros and cons
- IVA definition
- What is an IVA?
- Why choose an IVA?
- Who is suitable for an IVA?
- IVA benefits
- IVA stages
- False IVA adverts
- IVA compared to Bankruptcy
- IVA compared to debt management
- IVA compared to debt consolidation
- IVA compared to administration orders
- How the IVA got so popular and famous
- Things you should know and do before you start an IVA
- Will an IVA make creditor phone calls stop?
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
[more...]
DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]