What is the cost of an individual voluntary arrangement (IVA)?

Do you have to pay for an IVA? Neil Dingley, an Insolvency Practitioner and Partner of Moore Recovery in Stoke on Trent, explains the costs involved with an IVA.

Cost of an IVA UK

What is an IVA?

An individual voluntary arrangement (IVA) is a formal, legally binding agreement with an individual’s creditors to pay all or part of their debts over an agreed period of time.

In most cases, an agreement is made to make regular and/or lump sum payments, for example from the sale of assets or from a third party to an insolvency practitioner who, after deducting the costs and expenses of administering the IVA, will divide this money between creditors and pay out one or more distributions. 

An IVA can give an individual more control of their financial situation and which assets are offered up to creditors than a bankruptcy.

Do you have to pay for an IVA?

Yes. An individual will need to pay for an IVA to be proposed and administered and will need to instruct a licensed insolvency practitioner to act for them. In most cases, an initial conversation with an insolvency practitioner for advice about an IVA will be free of charge. 

A qualified insolvency practitioner will usually charge two fees:

  1. a set-up fee called a Nominee Fee
  2. a handling fee called a Supervisor Fee

It is likely expenses will also be charged, which are third party payments necessary to conduct an IVA.

What do IVA fees cover?

Nominal Fee

The Nominee Fee covers the cost of assisting an individual in putting together an IVA Proposal and presenting it to creditors. The amount varies between insolvency practitioners, and there are no professional or legal guidelines on what insolvency practitioners should charge, but the industry standard is typically either the first five payments into the IVA or £2,000.

Supervisor Fee

The Supervisor Fee covers the ongoing costs of administering the IVA. Again, the amount varies between insolvency practitioners, but the industry standard is typically 15 per cent of realisations, to cover the ongoing costs of the IVA.


Expenses are likely to include:

  • the insolvency practitioner’s bond (insurance to protect any money paid into the IVA)
  • any system maintenance fees
  • postage costs
  • registration fee to register the IVA with the Insolvency Service

When looking to propose an IVA, a quote for the Nominee and Supervisor Fee should always be obtained prior to signing a letter of engagement or IVA Proposal.

How do you pay for an IVA?

When the Nominee Fee becomes payable depends on the insolvency practitioner; some will ask that the fee is paid up front, but the industry standard is that an individual would pay their monthly contributions or funds realised from the sale of assets to pay the Nominee Fee at first, then the Supervisor Fee would be deducted from ongoing payments into the IVA.

How much does it cost when the court refers you for an IVA?

If the court has referred an individual to an insolvency practitioner for an IVA during bankruptcy proceedings, a fee of £335 is paid to the insolvency practitioner. This fee will be taken out of the deposit they paid to the court when making their application for a bankruptcy order. 

About the author

Neil Dingley is an Insolvency Practitioner and Partner of Moore Recovery in Stoke on Trent and has a background in information technology and accountancy.

See also

What is an IVA and is it right for you?

What is an IVA completion certificate?

What debts are included in an individual voluntary arrangements (IVA)?

What are your options when an IVA fails?

Find out more

Options for paying off your debts: Individual Voluntary Arrangements (GOV.UK)

Image: Getty Images

Publication date: 27 September 2021

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.