The real truth about Extra IVA fees: Charging You for a Commision for an Insolvency Practitioner!

by admin on 14 September 2011

I just read the Individual Voluntary Arrangement article on Wikipedia and I must say I am really angry. Despite the article containing a lot of facts about IVAs it is missing information under the IVA fees section. As I have explained a dozen times including emphasizing in this article: go directly to an Insolvency Practitioner it is so important that you don’t pay an upfront cash based fee for some salesperson to arrange your IVA. Also it is important not to get caught on too a high a paying insolvency practitioner as I mentioned in Why how much you pay for insolvency practioners fee matters

IVA Commision Fees

Let’s recall about the Fees in the IVA. Remember you are the person in debt. You make a statement of affairs you see that yes you have a debt problem and you are suitable more for an IVA than bankruptcy as you do not want to lose the family home.

Some people then ring the debt managment companies” those who answer are in fact some smooth salesman who will sell them a “debt solution”. The IVA which they are sold adds an arrangement for the arrangement fee or a commision for an IVA. Typically this can be two months extra of payments for the five year arrangement. The rate is the same rate as the borrower pays per month and the IVA is then extended to five years two months.

Pretty nasty eh? I am objecting to the commission fee. There are other IVA fees aswell. These are normal and are agreed with your creditors. The are broken down into a nominee’s Fee and a supervisor’s fee. The former is a fee charged in relation to the work performed before the IVA is agreed. It is reclaimed from payments into the IVA before any dividend is paid to creditors. The later is an ongoing fee in for the supervisory work performed during an IVA. It is reclaimed from payments into the IVA at regular intervals, as agreed with voting creditors. The payment can be made quarterly or annually depending on the rules stipulated in the individual’s proposal.

I’ll end the rant for now. Just watch out for those nasty commission fees friends!! I’ve added a small change to the wiki.

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