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IVA Costs

In any Individual Voluntary Arrangement (IVA), you propose what you can afford to pay off your creditors.

Creditors do not operate minimum volume levels or hurdle rates for ClearStart cases. They understand that each individual's circumstances are different, and reply upon ClearStart to assess what is affordable. Provided creditors are satisfied that you are paying what you can sustainably afford, your IVA should be accepted.

Minimum monthly payments

The most common type of IVA involves 60 monthly payments into a fund over a five year period. These tables show the probable outcomes at various levels of debt.

  = Rejected   = Borderline   = Accepted

Return to creditors after costs

			Monthly payment
Debt	£100	£125	£150	£175	£200	£250	£300	£500
£80,000	6%	7%	9%	10%	12%	15%	18%	30%
£60,000	8%	10%	12%	14%	16%	20%	24%	40%
£40,000	12%	15%	18%	21%	24%	30%	36%	59%
£30,000	16%	20%	24%	28%	32%	40%	47%	79%
£20,000	24%	30%	36%	41%	47%	59%	71%	100%
£15,000	32%	40%	47%	55%	63%	79%	95%	100%

Debt written off including costs

			Monthly payment
Debt	£100	£125	£150	£175	£200	£250	£300	£500
£80,000	£75,260	£69,686	£63,492	£56,908	£50,164	£42,733	£35,137	£24,727
£60,000	£55,260	£49,803	£43,901	£37,831	£31,854	£25,562	£19,504	£11,799
£40,000	£35,260	£30,037	£24,697	£19,576	£14,936	£10,511	£6,774	£2,760
£30,000	£25,260	£20,271	£15,466	£11,190	£7,654	£4,630	£2,435	£511
£20,000	£15,260	£10,739	£6,921	£4,050	£2,130	£868	£251	£0
£15,000	£10,260	£6,207	£3,265	£1,459	£537	£113	£6	£0

Total paid into IVA including costs

			Monthly payment
Debt	£100	£125	£150	£175	£200	£250	£300	£500
£80,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000
£60,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000
£40,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000
£30,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000
£20,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000
£15,000	£6,000	£7,500	£9,000	£10,500	£12,000	£15,000	£18,000	£30,000

Full and final settlements

You may also consider a full and final settlement IVA, for example from the sale of a property or funds from a family member. Creditors will look sympathetically at an offer which provides immediate funds in exchange for writing off debt.

The IVA and your home

Unlike bankruptcy, an IVA will not force you to sell your property. If there is equity in the property, however (if it is worth more than the loans against it) then creditors will seek to release it and pay it into the IVA as a lump sum. You may be able to avoid paying a lump sum from your property if any of the following apply:

• Equity is less than £5,000
• Redemption penalties would make the sum realised negligible
• The nature of borrowing against the property makes equity release impossible
• Payments from income alone are enough to pay your creditors in full

Insolvency practitioner fees

Creditors and IVA providers have agreed an industry-standard scale of charges for setting up and administering the IVA over (normally) five years. Most leading UK Insolvency Practices do not charge fees for setting up IVA's to you directly. Instead, they agree with the creditors to take their fees from the funds paid into the IVA, which would otherwise go to the creditors.

Further Reading:
IVA Help | How an IVA works | IVA Costs | IVA Criteria | IVA Approval Process | How to Start IVA | What Is an IVA?

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