Everlengthening IVA - The Fees Debate

[chris_]

Having just read the post from IVA news about banks no longer accepting IVA's that cost more than £4,500 as they are angry over average fees of £7,500 I just wonder what the 'costs' actually are for.

If the £4.5K (or even the £7.5K average) covers IP's for the costs and their profits then the amount of work they need to do for this should be relative - shouldn't it ?

My IP claims that everything he has charged me for is acceptable and above board and that only his paperwork is lacking. However in year 5 I was charged about £4,000 for that year alone and as everyone knows my IP's fees are now £16K and rising when they originally quoted about £1K/year to run the IVA.

Take that old bug bear 'case reviews' for example, my IP has spent as much on case reviews as the banks are saying the whole IVA should cost.
They have spent more in banking and filing than the banks are saying the whole IVA should cost.

Just how much should an IVA cost to run in say year 3, 4 or 5 of an IVA ? and what does that break down into - how much for banking, how much for case reviews, how much for dealing with creditors and courts for example.

Can anyone out there shed any light on this ?

Chris.

[MelanieGiles]

Chris

Insolvency Practitioners time spent on case supervision is based on the amount of time actually spent multiplied by the charge out rate of the various members of staff working on the file. So similar to your case, expcept most IPs put a cap on their fees generally between £800 and £1,200 per year. If the creditors want this work done more cheaply, then IPs will have to spend less time on the cases - and I personally do not feel that this will benefit anyone.

I am actually a great believer in results based fees - based on a percentage of realisations, but we will all have to await the outcome of Thursday's meeting to see what the banks have to say.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

For further details contact me at http://www.melaniegiles.com and view my IVA blog at: http://melaniegiles.blogs.iva.co.uk