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Understanding IVA Fees: Who Really Pays?

IVA Fees

When you’re grappling with debt, considering the various options can sometimes feel like navigating a maze. One popular solution in the UK for managing and potentially writing off a portion of your debts is the Individual Voluntary Arrangement, or IVA. But with any debt solution comes concerns about costs and fees. In this blog post, we’ll clarify the fees associated with IVAs and explain how they are covered.

What is an IVA?

Before diving into the fees, it’s essential to understand what an IVA is. An Individual Voluntary Arrangement (IVA) is a formal agreement made between you and your creditors. It allows you to pay back a portion of your debts over a set period, typically five or six years. At the end of the agreed term, any outstanding debt is written off.

IVA Fees: What Are They?

There are three primary fees associated with an IVA:

  1. The Nominee Fee: This is the fee for setting up the IVA. It covers the work involved in proposing the IVA to your creditors, including putting together all of the documentation and communicating with your creditors.

  2. The Supervisor Fee: This fee covers the ongoing work of the insolvency practitioner (IP) in managing and supervising the IVA over its term. It involves collecting payments, distributing these to creditors, and dealing with any issues that arise during the IVA’s lifespan.

  3. Disbursements: These are additional costs associated with the administration of the IVA. They might include insurance to protect your payments, system costs, or other necessary outlays.

Who Pays the IVA Fees?

This is where most misconceptions arise. Many people believe that when they enter an IVA, they will have to pay these fees out of pocket, in addition to their debts. But here’s the good news: you, the client, do not directly pay these fees.

Instead, the fees are taken from the payments you make into the IVA. Here’s how it works:

  1. Monthly payments: Based on your financial circumstances, an affordable monthly payment amount will be determined. This payment is what you can realistically afford after accounting for your essential expenses.

  2. Deduction of fees: Out of this monthly payment, the insolvency practitioner will deduct their fees. What remains is then distributed amongst your creditors.

  3. Dividend payments to creditors: Your creditors will receive their share of the monthly payment, known as a dividend, after the fees are taken out.

In essence, your creditors are indirectly covering the cost of the IVA fees, because the fees reduce the amount they receive in repayments. This is why it’s in the creditors’ best interest to ensure the fees are fair and not exorbitant.


If you’re considering an IVA as a solution to your debt problems, it’s essential to understand that the fees associated with this debt solution will not burden you with additional out-of-pocket expenses. The fees are deducted from the agreed monthly payments, which means you’re only responsible for the single, affordable monthly payment. Always ensure you receive advice from a reputable source when considering an IVA or any other debt solution.