How much does an IVA cost?

The question of cost really splits into two parts:

How much your IVA will cost per month
You'll only ever pay what you can realistically afford.

There's no fixed minimum to those monthly payments - if you can afford them and your lenders are prepared to accept them, your IVA can go ahead provided 75% (by value) of your lenders agree. If your circumstances change, your Insolvency Practitioner (IP) might be able to negotiate a change to the level of the payments you're making. This is important as if you fail to keep up your IVA, you can be at risk of bankruptcy.

If you're a homeowner, you may be asked to release some equity from your home by remortgaging to contribute to your debts. This may be difficult whilst in an IVA and could potentially mean paying a higher level of interest. If you can't release equity for any reason, your IVA may be extended by a year to help you repay more debt.

How much an IVA will cost you in fees
An IVA always comes with fees. It's a formal, legally binding agreement that takes a lot of work from the professionals involved in making it a success. To see a breakdown of our fees please click here.

How are IVA fees paid?

The point of an IVA is that you pay as much as you can - and your lenders agree to that. So your monthly payments will be based on what you can realistically afford.

What's more, the payments you agree to when your IVA is being set up will cover all the fees involved as well as all payments to your lenders. So you'll know exactly what you'll be expected to pay before your IVA actually starts.

What do the IVA fees pay for?

A lot of work goes into making an IVA a success, from making sure the terms are fair to everyone involved, to dealing with any issues that arise while your IVA is in place.

  • If the Insolvency Practitioner (the professional qualified to handle insolvency cases) agrees that an IVA is the best approach, they'll work with you to draw up an IVA proposal, the document which tells your lenders all about your finances and shows them what terms we're suggesting.
  • Your lenders will have two weeks to consider the terms laid out in the IVA proposal.
  • Your IP will arrange a 'creditors meeting'. You don't need to attend but you should make yourself available (by phone) in case any of your lenders want to discuss anything, or suggest changes to the proposal. If they do, your Insolvency Practitioner will help you decide if those changes are reasonable, or if you'd be better off considering a different debt solution.
  • Your lenders will be invited to vote on the proposal. For your IVA to go ahead, you'll need to get approval from lenders who collectively account for 75% of the total unsecured debt. Note that if a lender doesn't vote, their share of the debt won't count in that equation.
  • If enough lenders approve of the IVA proposal, your IVA can start. All your unsecured lenders will be legally bound by the terms of the IVA - even the ones who didn't vote, or who voted against it.
  • Once your IVA is in progress, your Insolvency Practitioner's job isn't done. Your IP will do everything they can to make sure the IVA is a success. That involves ensuring that the terms of your IVA are adhered to, distributing payments, handling paperwork, dealing with any issues that come up and so on.

If, for example, your financial situation changes while your IVA is in progress, your IVA could fail if you can't stick to the terms you agreed - but your Insolvency Practitioner is there to help you avoid that, if at all possible. So:

  • They'll look at your new situation and decide if a few changes to the terms could help your IVA succeed even with the change in your circumstances.
  • If so, they'll draw up an IVA Variation - a legally binding change to the terms of the agreement, which would need to be approved in the same way as your original IVA proposal.

So there you have it: all costs will be covered by your normal payments to your IVA.

If you would like to know how much your monthly IVA repayments could be, please call 0161 672 8990 now, and discuss your payments with one of our IVA specialists.


It's good to know:
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To find other sources of free advice visit Money Helper. It's here to listen and give free, impartial, trusted guidance. Based around you and backed by government.

Subject to eligibility and acceptance. Fees Payable. Debt write off applies to unsecured debts only and on completion of an IVA, alternative solutions may be offered. If your IVA fails, it could lead to Bankruptcy. Your ability to obtain credit will be affected for at least 6 years. Homeowners may be required to release the equity in their property.