IVA Costs & Fees
We do not charge you for our service - but don't be mislead into thinking IVA companies offer a free service.
Much of the advertising for IVA's gives the impression that IVA companies offer a free service or that the fees charged are of no importance to the debtor.
This is very misleading.
Why IVA Fees are important
If you have been reading up on IVAs, you will know that it is the creditors who bear the costs. What this means is that the IVA company charges the creditors for its services. Creditors are happy to do this as the IVA company works with the debtor to come up with a plan to avoid bankruptcy, hence recovering more of the creditors money than if bankruptcy took place.
Fees are part of the IVA proposal. Therefore, not only are the creditors considering your personal circumstances and how much you are able to afford to pay back, they are taking into account how much of their money they'll eventually get back once the IVA company has deducted their fee.
Because our fees to the creditors are low, we help more people with debt problems than most other IVA companies.
Typical Fees Of Other IVA Companies
When proposing an IVA, you're offering to pay back between 25p and 100p in the pound, normally over 5 years. This is called the dividend.
The creditors receive this dividend, minus the IVA company's fee. Therefore it is true that the creditors bear the cost of an IVA by accepting these terms, however the charges levied by the IVA company is a factor in whether creditors accept or reject the proposal.
The IVA fees charged to the creditor are in 2 parts.
- A Nominee's Fee - often £2500 +vat
This is the fee for preparing and proposing a IVA. - A Supervisor's Fee - often £1000 +vat per year.
This is the fee for supervising the IVA for the normal 5 year duration.
The amount each creditor is charged is based on the proportion of the debt owed to that creditor.
Therefore, many other IVA companies indirectly pocket almost £9000 (including vat) of your money should the IVA complete.
Our Low Fees
Our fees are considerable less than the industry normal.
- Our Nominee's Fee
£750 +vat for debts under £15,000
£1500 +vat for debts over £15,000 - Our Supervisor's Fee
£600 +vat per year.
Therefore our fees are £3,750 +vat or £4,500 +vat, depending on the level of the debt. This is about 40% less than many other IVA providers.
It is therefore in you best interests that you choose an IVA provider than allows for more of your money to go towards your creditors.
IVA company gets paid first
Before the creditors see any of their money back, the IVA company takes their Nominees Fee from money paid into the IVA. So, if you choose one of the high fee IVA providers, you will be be paying over £3000 before your creditors see an penny of their money.
This can be of serious consequences if you fail to maintain payments and the IVA fails. The IVA agreement will be terminated and your debts will be no lower than before.
IVA Minimum Levels of Debt
In UK Insolvency Law, there is no minimum level of debt for an IVA.
Due to the costs involved, there must be a minimum level of debt to allow a substantial repayment to the creditors.
Many IVA companies will only propose an IVA for debts of over £20,000. However, often people owe more than they realise. Bearing this in mind, many IVA companies advertise their services for debts of £15,000, knowing that many people thinking they have debts of around £15,000 owe more. Many such companies rarely accept cases for debts, actually of, £15,000.
Due to our lower charges, we routinely have IVA's accepted for debts of around £15,000, and many for £10,000 - £12,000. We've had IVA proposals accepted for debts of £8,000.
IVA's for such low debt levels are for exceptional circumstances. For example, if the debtor has an job such that bankruptcy means dismissal, for example a bank worker, an IVA is better for debtor and the creditors.
IVA Minimum Monthly Payments
In law, there are no minimum monthly payments for an IVA.
Most IVA advertising refers to minimum payments of £200 to £250. Our lower charges mean more for the creditors, hence lower minimum payments - therefore we can get more people accepted onto an IVA.
We have many clients paying as little as £150 - £170 into their IVA's. A few pay as little as £140 per month, however, these are exceptional cases as per the example above.
Our Excellent IVA Approval Rate
Our failure rate at the creditors meeting is currently 3.2%, other large IVA companies publish a failure rate of 8%.
As our fees are low, it is in essential for us to maintain this excellent record. We only have cases rejected when someone has been less than honest with us. For example, creditors find our about debt not included in the IVA proposal.
No Up Front Payments
We do not charge up front fees.
Many IVA companies charge up front payments from debtors to prepare an IVA proposal, typically £500. We consider this to be morally wrong as it often means more debt for the client. Some companies advise clients to borrow to fund this up-front the payment. Now, this is criminally wrong. This is incurring more debt when it is known that the client is insolvent and has no ability to, nor intention of paying it back.
Companies requiring an up front fee to prepare and IVA do so to cover their cost should the IVA proposal fail. If they have not got complete confidence in the approval of the IVA.
Keeping Our IVA Fees Low
Many debt companies offer only IVAs spend a fortune advertising this single service. As we offer the full range of debt solutions, we can help most people who contact us who can afford to pay at least £100 per month towards their debts.
Due to our professional excellence and experienced, highly trained staff, we are able to operate very efficiently. All this helps keeps our costs down while offering the highest standard of service.