How much does an IVA cost?
You do not pay IVA fees on top of your monthly payment — they come out of it. Costs, risks and what actually happens, explained without the sales pitch.
IVA costs at a glance
| Nominee fee | Fixed fee for preparing and reviewing the proposal — set out in the proposal itself |
|---|---|
| Supervisor fee | Ongoing fee for running the arrangement, usually a percentage of realisations |
| Your monthly contribution | Set by the income and expenditure assessment — not by the fees |
| When fees are taken | From within your monthly payments, after approval |
| Paid separately? | No — you should never pay upfront fees to enter a protocol IVA |
| If the IVA fails | Fees already drawn are not returned — one of failure’s real costs |
You never have to pay for debt advice. MoneyHelper (government-backed), StepChange, National Debtline and Citizens Advice all give free, confidential advice with no obligation. We would rather you got good advice somewhere than bad advice from anyone. The IVA calculator shows what the payments those fees come out of add up to over 60 or 72 months. The same fee structure applies in Birmingham and across the West Midlands; the Birmingham IVA guide covers local adverts that obscure it. The fees are only half the story — how IVA companies make money explains the incentive behind the advice.
The two fees
Nominee's fee. Covers the work of assessing your finances, drafting the proposal and putting it to creditors. It is normally taken from your early payments, which means that in the first months of an IVA, most or all of what you pay may be going to fees rather than to your debts.
Supervisor's fee. Covers running the arrangement for the full term — collecting payments, distributing them, annual reviews, and reporting. It is usually charged as a percentage of what is realised.
Disbursements. Costs such as insurance bonding, statutory advertising, and case administration.
Both fees have to be approved by creditors, and the fee basis must be set out in the proposal you sign. Ask for the total expected cost in pounds, not just percentages.
The question worth asking
Ask any firm proposing an IVA a very direct question: of the £X I will pay each month, how much reaches my creditors in year one? A firm acting properly will answer it. If the answer is uncomfortable, that is information you need before you sign, not after.
Why a free DMP can beat a paid IVA
In a free Debt Management Plan run by StepChange or Payplan, every pound you pay goes to your creditors. In an IVA, a portion goes to fees. The IVA's advantages are the legal binding, the fixed end date and the write-off at the end — real advantages that are often worth the cost. But they are not automatically worth it, and the comparison should be made explicitly rather than skipped.
Not sure which of these applies to you?
Answer eight questions about your circumstances and see which routes are worth understanding, before you speak to anyone.
Common questions
Can I be charged upfront for IVA advice?
Advice itself should not cost you anything upfront, and the FCA banned firms subject to its debt packager rules from receiving remuneration from debt solution providers for referrals from October 2023, because those incentives were found capable of distorting the advice given. If anyone asks you for an upfront payment before an IVA is even proposed, stop and get free advice.
What happens to the fees if my IVA fails?
Fees already taken are generally not refunded. If an IVA fails in year two, you may have paid twenty-four months of contributions with a significant share consumed by set-up costs, and your creditors can add back the interest that was frozen. Failure is expensive, which is why the affordability assessment at the start matters so much.
Related guides
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