In helping you to with an IVA, your (IP) or insolvency practitioner will act as Nominee and he/she is entitled to draw a Nominee’s fee for the work they do. Although this fee will be agreed with you, it is ultimately subject to approval by your creditors when they consider your IVA proposal. The fee is usually fixed and paid from realisations (the money you pay) in your IVA. In the event your IVA is not approved by your creditors, then at the discretion of your Nominee, this fee is written off.
The Nominee fee relates to the work carried out by the IP in assessing your financial circumstances and exploring all available options in determining that an IVA is a suitable solution for you. The Nominee drafts your proposal, prepares a Nominee’s report and convenes and holds a meeting of your creditors so that consideration can be given to your proposed IVA.
If approved, the IP then becomes Supervisor of your IVA. As Supervisor, their role is to monitor and collect your contributions, conduct periodic reviews of your income and expenditure. Your Supervisor may seek to vary or fail the arrangement if appropriate to do so, although ultimately, it is envisaged that the Supervisor will eventually conclude your IVA.
Supervisors fees will be calculated monthly, usually as a percentage of realisations (the money you pay). This is on the assumption that the arrangement runs full term, you cooperate fully, the arrangement does not have to be varied and the creditors do not increase the amount of supervision required in your original proposals. This will all be discussed with you.
In addition to fees, your insolvency practitioner will incur disbursements. These are costs and expenses incurred in the setting up and administering of your IVA. Examples of disbursements are Bond (case specific insurance), postage costs, registration of the IVA and software maintenance. Some disbursements are payable in priority to fees and once again are fully disclosed in your IVA proposal, agreed with your creditors and are drawn from the IVA.
It is likely that creditors will seek to set a maximum amount that can be drawn in respect of both fees and disbursements and again this will be discussed with you as part of the process.