IVA Fees and Costs
AFA Insolvency will only charge fees if creditors approve an IVA.
Our fees are taken from your monthly payment or asset realisations paid into your arrangement.
AFA Insolvency operates a transparent, inclusive fixed fee cost of £3,650, which incorporates the Nominee Fee, Supervisory Fee and all costs and expenses associated with the arrangement.
As part of your Proposal, we also offer to start distributing a percentage of the payments made by you from month three of your arrangement, or earlier in some cases, which means the balance owed to your creditors begins to reduce.
In some cases, creditors may try to amend the terms of the IVA so that we are not required to make payments to them until the Nominees Fee and Disbursements have been repaid. We will resist these attempts.
In an IVA, there are three different types of costs charged by an Insolvency Practitioner.
1. Nominee’s Fee
This fee covers the setting up and preparation of your IVA. This includes assessing your current financial situation and repayment offer to creditors, issuing the Proposal to your creditors, the administration and facilitation of the creditors’ decision process used to consider the IVA, and any negotiations with creditors during this process.
Most other IVA providers will typically charge a Nominee’s fee of £1,000 but will also charge various additional costs and charges in addition (see below). We charge a fee of £1,900 to include all other necessary expenses.
2. Supervisor’s Fees
These fees are charged for the ongoing administration of the IVA, which includes collecting and distributing your monthly repayments, dealing with any queries raised by you or your creditors, completing an annual review of your financial circumstances, reporting annually to you and your creditors about the progress of the IVA, and dealing with the closing formalities.
Again, most other IVA providers will charge Supervisor’s fees based on a percentage of any monies paid into the arrangement, typically 15%. This means that the more you settle into your IVA, the higher the Supervisor’s fee.
At AFA Insolvency, we charge a fixed Supervisor’s fee of £1,750 regardless of your monthly contribution amount. In addition, we will charge an additional 15% on any other asset realisations that may come into your arrangement, for example, windfalls or compensation for mis-selling claims.
3. Disbursements
These are costs paid by the IP to third-party companies for various fees and expenses of administering the arrangement and will typically include software licences, insurance, and registrations required as part of the arrangement. These may also include payments made for additional services to provide the best return for your creditors.
Typically, the disbursements of an arrangement equate to an average of £2,000 per case if they are charged separately from the other fees. However, this is subject to individual circumstances and could vary.
IPs who charge disbursements separately to their Nominee and Supervisor’s fees will ensure that they and all accrued expenses are paid before any payment is made to your creditors. Unfortunately, this can mean that your creditors do not receive any payments for up to two years and, in some cases, even longer.
By charging an overall fixed fee of £3,650 to include all costs and expenses of the IVA and by making payments to your creditors from month 3, we believe we are offering a fairer allocation of your monthly contributions.