PHILIP A BECK MA ACA MABRP
Chartered Accountant
Licensed Insolvency Practitioner
41 Kingston Street, Cambridge CB1 2NU
Tel: 0800 1953605 (Free call) or 01223 367022
Fax: 0870 4580620
email: pbeck@ntlworld.com
IVA - What does all this cost and how do you get paid ?
The costs of setting up and running an IVA may seem high, but there is a lot of work involved in advising the client, preparing the IVA proposal, gathering all the information required, preparing and filing the Nominee's report, sending the proposal to the creditors and holding a creditors' meeting. This process needs to be supervised by a highly qualified professional, who will either be an Accountant or a Solicitor, specially licensed to undertake insolvency work.
Although there would be a couple of payments up to the date of the creditors' meeting, these would be set at the payment rate you are proposing for the IVA. Once the arrangement has been approved it won't cost you anything more, as all remaining costs and fees are paid from what will be going in to the arrangement, thus effectively the creditors themselves are actually paying for the IVA. Creditors realise that insolvency practitioners need to be paid for their work, therefore they do not object to proposals that show the IP's reasonable fees coming out of the money going into the arrangement.
Typically once enough monthly payments have been made after the arrangement has been approved, a fee of £1,500-2,500 + VAT will be drawn for the initial work in preparing and circulating the proposal and holding the creditors' meeting depending on the complexity of the case. Then once per year an annual supervision charge of typically 15% + VAT of all realisations going in to the IVA. The annual charge covers the cost of monitoring the monthly payments, general correspondence, and sending a report and dividend to the creditors once per year. Where two partners propose two IVAs in respect of joint household debts the initial cost is likely to be £3,000 + VAT with again the annual cost being set at 15% of realisations.
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IVA Questions and answers.
I have serious debt problems. What are the options ?
How do I know whether an Individual Voluntary Arrangement (IVA) is the best answer to my problems ?
How do I work out how much I can afford to pay per month ?
OK I'm considering an IVA . How does it work ?
Do I have to attend meetings, or can this all be done by correspondence ?
What do creditors expect from it and how likely is it they'll accept it ?
What happens if they don't like the deal ?
If the IVA is rejected, do I owe you anything ?
Will it really write off all of my debts ?
Will I live in poverty for the duration of the IVA ?
What if I win the lottery or get a big pay rise ?
Is an IVA more expensive than just going bankrupt ?
What will happen to my house, furniture, car and domestic effects ?
I run a business. What will happen to my business ?
I'm a professionally qualified person. Will I lose my livelihood ?
My partner has no debts, and I'm living with him/her. Will he/she have to contribute to the IVA ?
My partner and I have joint debts. Can we lump them all together in the same IVA ?
How do you get paid ? What does this all cost ?
What happens if I'm unable to keep up with the payments ?
What happens at the end of the arrangement ?
What other web sites do you suggest I look at for bankruptcy/IVA advice ?
Please note that this site deals only with personal insolvency law in England, Wales and Northern
Ireland. By law, only a Licensed Insolvency Practitioner can undertake an IVA for
you. If you need an Insolvency Practitioner in Scotland, visit The Institute of
Chartered Accountants of Scotland.
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