IVA Fees and Costs
If you enter into an Individual Voluntary Arrangement (IVA), there will be fees and costs involved. These are agreed and approved by your creditors as part of your IVA proposal. For clarity, fees and costs are not additional to your monthly IVA payments – they are deducted from the payments you make and distributed in accordance with the approved terms.
Types of Fees in an IVA
You will only be charged fees if your IVA proposal is accepted by your creditors. Once approved, the fees generally include:
- Nominee’s Fee
- Supervisor’s Fees
- Costs and Expenses
1. Nominee’s Fee
The Nominee’s Fee covers the professional work carried out by the Insolvency Practitioner in setting up your IVA. This includes:
- Gathering details of your income, expenditure, assets, and debts.
- Conducting your SIP 3.1 call to confirm the most suitable debt solution.
- Preparing your IVA proposal – setting out your financial position and repayment offer to creditors.
- Organising and holding the creditors’ meeting to seek approval of your proposal.
The Nominee’s Fee is paid first, before any other fees, from the payments you make into your IVA. It is requested in your proposal and approved or modified by your creditors.
2. Supervisor’s Fees
Once your IVA is approved, the Insolvency Practitioner becomes the Supervisor and is responsible for managing the Arrangement for its full term. The Supervisor’s Fees cover ongoing work such as:
- Receiving and distributing your monthly payments.
- Monitoring your income and expenditure.
- Conducting annual reviews and communicating with creditors.
- Managing any changes or variations to the IVA.
These fees are usually taken monthly in line with your regular contributions and are agreed by your creditors at the outset. If assets are realised (for example, from property equity or compensation claims) or if you receive a windfall such as an inheritance, additional Supervisor’s Fees may apply in line with the agreed terms of your IVA.
3. Costs and Expenses
In addition to the above fees, certain costs and disbursements may be incurred in administering your IVA. These can include items such as:
- Postage and stationery.
- Professional insurance.
- Banking and payment processing charges.
All such costs must be reasonable, fully recorded, and in line with the fees agreed by your creditors.
Protected Trust Deed Fees and Costs
If you enter into a Protected Trust Deed (PTD), there will be fees and costs involved in managing it. Your trustee will explain these before you sign. The fees and costs are paid from the money received into your PTD, including your monthly contributions and any funds received from assets. They are not added to your agreed monthly contribution. As fees and costs are paid from these funds, they affect how much is available to repay your creditors. Accountant in Bankruptcy: key facts about PTDs
Types of Fees in a Protected Trust Deed
The main fees and costs are:
- Trustee’s Fixed Fee
- Trustee’s Additional Fee
- Costs and Outlays
1. Trustee's Fixed Fee
The fixed fee covers the trustee's work in administering your PTD. This includes work such as:
- Reviewing your income, expenditure, assets and debts.
- Preparing the trust deed documents and notifying creditors.
- Managing your contributions and reviewing your circumstances.
- Assessing creditor claims, distributing available funds and completing the PTD.
The proposed fixed fee is disclosed to creditors when they are notified of your trust deed. The trustee will explain the fee to you before you sign. Accountant in Bankruptcy: trustee fees
2. Trustee’s Additional Fee
The trustee may also receive an additional fee calculated as a percentage of the contributions and assets collected during the PTD. This means the amount of the fee depends on how much money is received into the PTD. The percentage used to calculate this fee is disclosed to creditors at the outset. If additional funds are received during the PTD, for example from an asset or an inheritance, the fee calculated on those funds will follow the disclosed percentage. Accountant in Bankruptcy: trustee fees
These fees are usually taken monthly in line with your regular contributions and are agreed by your creditors at the outset. If assets are realised (for example, from property equity or compensation claims) or if you receive a windfall such as an inheritance, additional Supervisor’s Fees may apply in line with the agreed terms of your IVA.
3. Costs and Outlays
Other costs may be incurred where they are needed to administer your PTD. Depending on your circumstances, these could include:
- Property valuations or legal costs relating to an asset.
- Statutory registration or supervision fees.
- Other necessary third party costs.
These costs are recorded as part of the PTD accounts and are subject to the applicable rules and oversight. Your trustee can explain which costs are expected in your case and how they will be paid. Accountant in Bankruptcy: PTD outlaysAccountant in Bankruptcy: PTD outlays