In my present circumstances an IVA seems to be the best option for me. Before I consider going ahead I would like to know how much an IP will charge for providing their service. I need to know what the final total charge will be. Are the IP's very transparent with their charges as if it will seem a bit open ended I will want to use some one else? also is the charge fixed. If it varies what is it based upon?
When people start to be vague about fees I will head in the opposite direction fast..
Many thanks in advance
IP fees are actually set by creditors, and the general ruling is that 15% of the contribution may be drawn - subject to upper limits of around £2,000 per annum which would be very rare.
The fees your IP would propose to charge, ought to be very clearly laid out in the letter of engagement sent to you prior to them accepting the appointment, and you have the opportunity to discuss this with them at that time if you feel the proposed fees are inappropriate. the fees will also be clearly defined within the IVA proposal, which of course you are required to sign before it is issued to creditors.
Unless you are proposing to repay your debts in full, the IP fees are also largely paid by your creditors - ie the monies they receive are calculated after the IP fees have been drawn, but notwithstanding this it is essential that you understand the basis and quantum of professional charges before committing to any one firm.
Also remember that there are two stages of fees - at the nominee level, where the fee might be anything from £750 to £3,000 (perhaps more if you have a complex self-employed case), but the average nominee fee in the marketplace now seems to be around £1,700. Once creditors have accepted the proposals, the IP becomes Supervisor and generally charges fees at quarterly intervals at the same time as paying creditors.
I agree with most of what Melanie says. Today for a Protocol Compliant IVA (known as PCIVA) the Nominees fee can vary from around £650(we have done a few around £546)and £2,500. The last average that I looked at was around £1,500. The Supervisors fee can vary from around £458 to £800 per year.
All of these fees will vary as it depends on the mix of a debtors creditors where for example HSBC will only currently allow (as a maximum)the first 4 months of contributions to be paid - which includes VAT!
There is an overaul limit of 15% of realisations into the IVA to cover total fees. However there are wide variations and different fee structures for the larger self- employed cases but not for plumbers or taxi drivers etc.
There could be additional fees payable in respect of Variations (my firm charge £250 to £300) and other firms charge maybe £1,000.
There are as well disbursements covering the fees incurred for bonding and filing and aditionaly in my firms case just over 3% of the monthly contribution to re-imburse us for a PPI policy that we have.
The best bet is to list all that you owe detailing who your creditors are and ask for a reasonable estimate of the costs.
It does not cost you anything more that what your DI is to fund your monthly contribution.
How is that for transparency?
[:p]
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
The majority of companies are upfront about fees. Mine are detailed on my paperwork.
If you visit www.iva.com you will find a list of companies and reviews. Give one or two a ring and you will receive free and impartial advice about all the solutions available to you and the best way forward for your circumstances.
You can ask about fees at the same time.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
just mulling this over in my mind. If you get an iva say at 25p in the pound you basically pay back 25% of the initial debt plus about 15% of the 25% supervisor fees and possibly £1500 intial set up fees. Am I on the right lines here. Not that in essence all this matters an affordable monthly contribution is surely everybodies goal.
IVA.co.uk The best place for debt advice. Thanks to Melanie Giles, David Mond, David and J (Elv5) Kallis, Dand, Skippy, Andy Davie
Melanie, J has asked me to thank you for your help yesterday; I have thanked every body else on her behalf. I wished I had made some excuse not to say anything to her but we have never had secrets. I saw David's comments about fees and HSBC - do yours satisfy them? HSBC seem to be very difficult and they are my largest!! David
Hi
You are correct but do not be too concerned over fees, these will be agreed by your creditors as it is effectively them that are paying the fees by accepting a recuced dividend. Only if you are returning nearly a 100p dividend are you actually paying the fees yourself.
In theory the payments into your IVA, and hence the "cost", should be the same regardless of the company that you use as it should always be your disposible income.
The quality of service and advice that you receive from your provider is he most important aspect to look into
Regards
Last edited by David Mond on Fri Apr 10, 2009 6:01 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
My firm was one of the first four firms to be accepted by HSBC to propose IVA proposals at lower than the 40p in the £ hurdle rate. So I am happy that we meet their requirements in terms of fee structure and genereal quality of presentation.
Last edited by MelanieGiles on Fri Apr 10, 2009 7:46 pm, edited 1 time in total.
It was based in the main on ensuring dividend payments were remitted quickly. I am pleased to say my firm were the 8th I believe of the current 9.
Last edited by David Mond on Sat Apr 11, 2009 6:21 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
It means that if you choose one of the 9 firms with this approval, and you have HSBC as an influencing creditors - ie owing more than 25% - then they will consider accepting proposals which offer less than 40p in the £. This would be vitally important for anyone who fits into the lower bracket.
Absolutely true - and it is those nine who have embraced the protocol correctly and giving creditors their fair dues on time without affecting the debtors.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
I see
I need to seriously consider what may occur during the next five years. If in the future I got a better job and was able to have more disposable income. Perhaps I would pay more of the debt off, or agree a final settlement figure etc.
If this were the case then the amount I would have to pay may end up more if the IP were higher. I am not convinced by some of the comments above that I should not be concerned about the fees.
Is it possible to put my details together and approach a few IP's for a draft IVA proposal and assess the quality of the advice offered and the IP fees (which are hopefully agreed in advance and not variable) and then simply go with the one I choose. Or are there factors which would not allow me to do this??
