How much does an IVA cost?

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This guide will cover IVA costs and fees in more detail, including how they’re broken down and who’s responsible for paying them.

If you’re considering an IVA, it probably means that you’re struggling with debt and are looking for a way to make your repayments more manageable and affordable.

But how much does it cost to get an IVA? And will you be able to afford it on top of your debt? The good news is, you’ll never be asked to pay more than you owe with an IVA and can breathe easy knowing there are no upfront costs involved.

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a formal agreement between you and the people you owe money to (your creditors) to repay your debts through a regular monthly payment based on what you can afford.

During an IVA, your creditors won’t be able to contact you or take you to court and all interest and charges will be frozen. This can allow you to focus on making debt repayments without worrying about your balance increasing or bailiffs knocking on your door.

The average IVA lasts five years, but it can last six years if you miss payments and need to make up for the money owed. This can happen if you’re given a payment break or fail to release equity from your home, for example.

IVAs can only be arranged and managed by Insolvency Practitioners (IPs), who are licensed and authorised to act on behalf of insolvent individuals. They will work out how much you can afford to pay towards your debt each month and distribute your monthly payments among your creditors.

How does an IVA work?

There are several steps involved in the IVA process and it can be useful to know what to expect before you apply. We’ve outlined each step in more detail below:

Meet with an Insolvency Practitioner

The first stage in the IVA process is meeting with an Insolvency Practitioner (IP) – you will be assigned an IP if you apply through a debt help company.

They will review your income and expenditure and discuss all available options to ensure an IVA is the right debt solution for you.

Approve your IVA proposal

If you’ve been deemed a suitable candidate for an IVA, your IP will get to work creating your IVA proposal, which is essentially a document outlining your financial situation and how much you can realistically afford to pay towards your debt each month.

Once you are happy with your IVA proposal and your proposed payments, it will be sent to your creditors for approval.

Wait for your creditors’ decision

The process of waiting for your creditors to vote on your IVA is known as a ‘creditors meeting’. This is, however, just the name given to the voting round of your IVA and doesn’t mean that your creditors physically meet in person to discuss your debt.

The creditors to which you owe 75% of your debt must agree with your IVA proposal for it to go ahead.

Start your IVA

The final step in the process is starting your IVA. From this point, all interest and charges will be frozen and your creditors will be instructed to stop contacting you about the debt.

This is also when you’ll be informed of your first monthly IVA payment, which will typically be within 30 days of your IVA being verified and on the same date each month thereafter.

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How much does an IVA cost?

There are three main fees associated with an IVA: the nominee’s fee, the supervisor’s fee, and disbursement costs.

However, it’s important to note that all of these fees will be taken from your usual monthly payments and you’ll never be asked to pay fees on top of what you already owe at any point during your IVA.

We’ve explained each fee in more depth below:

Nominee’s fee

The ‘nominee’s fee’ covers the cost of setting up your IVA and is usually capped at an amount equal to your first five monthly payments. This payment will be taken before any money is sent to your creditors to ensure your IP is compensated first.

Supervisor’s fee

The fixed ‘supervisor’s fee’ covers the cost of managing your IVA on an ongoing basis and is typically spread out throughout your IVA. This payment will also be taken before any money is sent to your creditors and typically after the nominee’s fee has been paid.

Disbursement costs

‘Disbursement costs’ are fees paid to third parties for the miscellaneous payments involved in setting up and maintaining an IVA, such as legal advice, a registration fee, and insurance.

Who pays IVA fees?

Because IVA fees are taken from the monthly payments that are supposed to go to your creditors, your creditors technically cover the cost of your IVA fees by accepting less than what they are owed.

The money will be sent to your IP first and they are responsible for ensuring your first five payments go towards covering the various fees and costs involved. They will then distribute your monthly payments evenly among your creditors going forward.

Remember, your monthly payments will be based on your income and expenses so you’ll never be asked to pay more than you can reasonably afford.

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Unlike other debt solutions, there are no upfront fees involved in an IVA as all fees will come out of your usual monthly payments.

This means that your creditors will technically cover the cost of your IVA by accepting less than what they are owed.

IVA payments are sent before any of your debt payments are sent to your creditors so if your IVA fails within the first few months, your balance will likely stay the same.

Key Takeaways

An IVA is a formal debt solution designed to help you repay your debt through a series of smaller monthly payments
IVAs must be set up by Insolvency Practitioners (IPs) licensed by the Insolvency Service
IVA fees are made up of a nominee's fee, supervisor's fee, and disbursement costs
Your creditors cover the cost of your IVA fees by accepting less than they are owed
IVA fees are taken from your monthly debt repayments and are paid first
Maxine McCreadie

Maxine McCreadie

Author/Debt Expert

Maxine McCreadie, prominent personal finance writer featured in Vogue and Yahoo News, delivers practical guidance, simplifying money management and championing financial literacy.

How we reviewed this article:


Our debt experts continually monitor the personal finance and debt industry, and we update our articles when new information becomes available.

Current Version

May 28 2024

Written by
Maxine McCreadie

Edited by
Ben McCormack

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