Recommendations 2005 - Fees for IVAs

As in the case of other insolvency procedures, fees for IVAs have to be approved by the creditors’ committee or a meeting of creditors. IPs usually seem to charge a fee, which in some cases may vary from client to client, for their initial work as the nominee setting up the IVA and a separate fee for its supervision based either on chargeable hours or on a percentage of the debtor’s contributions plus realised assets.

The report by the Working Party set up by the IS on a SIVA noted that in a minority of cases the fees charged led to controversy because they appeared to be disproportionate to what the debtor paid into the IVA and what was distributed to the creditors.

The Working Party’s Report accordingly recommended that for SIVAs, IPs should charge a fixed fee for nominee work and that supervision fees should be collected monthly out of the debtors’ contributions either in the form of a fixed administration charge or as a set percentage of realisations. No fee should be received if the creditors are not receiving a dividend..

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