When your finances are in a bad enough state that you are having to consider an IVA (Individual Voluntary Arrangement ), it’s best to make sure you understand the potential costs involved.
The costs of pursuing an IVA tend to be significantly less than those that are associated with bankruptcy proceedings. This is partly because there are no statutory costs for IVAs. The main costs you can expect to have to cover for an IVA are those chargeable by the Insolvency Practitioner (IP) who handles your case.
In order to get an IVA, you need to use an IP, as they are the only professionals licensed to carry out the required processes within the UK legal system. An IVA is a legal contract between you and your creditors, and so must be handled by someone with the required expertise and standing.
Your IP should be able to make sure you know what costs are going to be payable for their services. If you are unsure at any time just ask them for clarification. If your finances are already in difficulty, the last thing you need to deal with is a hefty unexpected bill.
While the IP is helping you to draw up and propose an IVA, they are acting as Nominee. Once the IVA is accepted, they will be the Supervisor, and will be responsible for the administration of the IVA. These two distinct stages in the progress of the IVA tend to have separate costs, as there is no guarantee that your IVA will in fact be accepted and get to the second phase.
IVAs tend to be attractive to people partly because of the relatively low costs involved, however, it’s always worth making sure you know about any potential costs up front before taking any decisions.