Fees in an IVA

[OPTIMIST12]

I was very interested to read Andys blog regarding his meeting with a gentleman from TIX - and at which the level of IPs fees was discussed. I noticed that it was stated that under the new guidelines an IVA requiring a monthly payment of £1200 per month would equate to overall IPs fees of £15k. This caught my eye as my current monthly payment is well over £1200 but my total fees ( initial nominee AND supervisor inclusive) are £7000 + VAT. I hope I will be allowed to stick with this arrangement!!!!

To be honest I guess that this is all out of the individual IVAers control - and probably concern!!! - but as long as my Creditors and IP are happy with the fees I am paying then I would like to say thank you to both parties. IVAs seem to be constantly evolving and a lot depends on when you jump on the train.

[jpj]

Im sure IVAers will always be concerned about fees ! Creditors want a certain amount of money back,the higher the fees the less creditors will get at the end of the day,so more will take NRs view and start refusing IVAs.
AS an IVA proposal is to pay back AS MUCH AS YOU CAN AFFORD,IPs cant go to the insolvent person and ask for higher payments because fees have gone up!
And in your case,if fees double from 7k to 15k +VAT im sure the government are doing very nicely on the VAT front (or does each creditor claim back a certain percentage of the VAT that the IP charges??)set

[OPTIMIST12]

Hi jpj -

I agree - thats why I was surprised at the news that fees of £15k were acceptable to TIX. When I say IVAers may not be concerned about fees - I had in mind that the main priority for the individual debtor is that the IVA is accepted by all parties and progresses to a mutually acceptable completion! As long as the Creditors and the IP are happy with the breakdown of Payments / Dividend / Fees then the completion of the arrangement is priority number one. I do agree though that it would be preferable to see lower fees so that as much as possible is repaid.But I know Melanie and Catallus have both expressed concerns recently about downward pressue on fees.

I have always been curious about the VAT angle too!!!

Thanks for your comments.

[MelanieGiles]

Can I just nip this one in the bud by explaining that IPs would much rather continue to charge the fixed fees that they have been charging quite successfully for the last 10 years. Although the charging rates in my practice have increased on an annual basis since 1999, my IVA based fixed fees are the same as they were then. And the workload has increased as a result of a lot of modifications introduced by creditors over this period - we don't just sit there doing nothing you know!!!

However, if creditors decide to stipulate a differing charging system - we have to abide by that or else the majority of new entrants will not have their IVA's accepted.

I do not expect that fees will actually reduce to a great extent across the board, but what is concerning is that creditors in cases where there are higher contributions are getting a lower return than they might expect to fund shortfalls in lower ended cases. But if that is what creditors have agreed that they want on a global basis, we have no choice but to abide by the rules.

And this just effects new IVAs, so the fees in your case, Optimist, will continue as normal.

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

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