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How much does an IVA cost?

An Individual Voluntary Agreement (IVA) is a form of reduced payment plan, and therefore a wonderful way to escape any debt-based worries. However, an IVA can be expensive in that you will be required to pay for the services of an insolvency practitioner to manage your case. All cases are different, and therefore how you will pay this money and how much you pay will vary greatly. Find out what the cost of an IVA would be to you.  In general, the average IVA costs around £5,000 – with payment options including a one-off lump sum or regular monthly payments.

Such services are expensive because you are effectively paying the person to perform three roles; that of a financial advisor, an IVA monitor, and a nominee. As a financial advisor, your insolvency practitioner will be responsible for ensuring you get the repayment plan that best suits your needs, as well as ensuring you adhere to your repayment agreement. As an IVA monitor, this person will also be responsible for making sure they receive and distribute all of your monthly payments, as well as dealing with any unexpected issues that may arise. Finally, as a nominee, they will be in charge of all logistics, including creating the proposal and submitting it to court, as well as arranging and conducting all preliminary meetings between you and your creditors.

As well as the cost of an IVA, you also need to consider the affects of an IVA on your life.

Is an IVA my best option?

IVAs are the best option for many as they are legally binding with your creditors and debt is usually cleared within 5-6 years. Assets can be kept and a payment structure is made that suits your situation. However an IVA can be very strict and needs to be kept to. If it fails then there is a risk of bankruptcy. Certain professions can also be affected by insolvency, so check your contract of employment before going forward with an IVA.  Whether you’re accepted onto an IVA or whether other options such as Debt Relief Orders (DRO) or Bankruptcy are better options, depends on certain criteria. Complete our quick online assessment to see which is best for you.

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What debt is included in an IVA?

An IVA is a comprehensive Debt Repayment Plan, and therefore covers the majority of common debts people find themselves in. However, as with all such repayment plans, there are certain debts that are not covered. Because of this, it is recommended that you fully research what types of debt are included to ensure that an IVA is the best possible solution for your unique situation. The types of debt covered by an IVA include:

  • Personal loans
  • Overdrafts
  • Credit cards and store cards
  • Gas and electric arrears
  • Council tax, income tax, and national insurance arrears
  • Short-term loans such as payday loans
  • Outstanding bills such as solicitor’s costs and veterinary bills

What debts are not included in an IVA?

Whilst IVAs are generally comprehensive in the types of debt they cover, as with all such repayment plans, there are certain debts that an IVA will not cover. What this means is that even if you enter an IVA, you are still responsible for these debts and therefore must continue to make payments to these creditors. The types of debt excluded from an IVA include:

  • Mortgages and secured loans
  • Hire purchase agreements
  • Court fines
  • TV license arrears
  • Child support arrears

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