The Core Principle: No Upfront Fees
The most important thing to understand about IVA costs: you never pay anything upfront. All fees are built into your agreed monthly payments and deducted before funds reach creditors. This is a regulated, transparent process — you should never be asked to pay before your IVA is approved.
The Nominee Fee
Covers the IP's work before IVA approval — drafting the proposal, creditors' meeting, and negotiations. Typically £1,000–£1,500, deducted from early monthly payments. All disclosed in the IVA proposal in advance.
The Supervisor Fee
The IP's ongoing management fee during the IVA term — receiving payments, distributing to creditors, annual reviews, and issuing the completion certificate. Typically around 15% of realisations (funds collected). Capped and disclosed in the proposal, reviewed by creditors before approval.
A Simple Cost Example
- Total debt: £20,000 | Monthly payment: £200 | Term: 60 months
- Total contributions: £12,000
- Nominee fee: ~£1,200 | Supervisor fee (15%): ~£1,800
- Total fees: ~£3,000 | Net to creditors: ~£9,000
- Debt written off at completion: ~£11,000
These are illustrative figures only. Your IP's actual fees will be stated in your IVA proposal and approved by creditors before the IVA begins.
Red Flags — Never Pay Upfront
Any firm that asks for upfront payment before IVA approval should be avoided. This is not standard practice for licensed IVA providers and may indicate fraud. Verify any IP's licence at gov.uk before proceeding.
Watch out for: upfront "application fees"; "consultation fees" before the IVA starts; pressure to decide quickly; guarantees that the IVA will definitely be accepted; firms not listed on the government's Insolvency Practitioner register.
Verifying Your IP
Always verify your Insolvency Practitioner on the gov.uk Insolvency Service register. Authorised bodies include ICAEW, IPA, ACCA, and ICAS. If in doubt, contact a free debt charity who can refer you to a reputable, licensed IP.