The cost of an IVA
As each person has differing circumstances, each and every IVA proposal is different to the next. Therefore, debt management companies will require different monthly contributions according to each client’s personal circumstances.
The monthly payment for an IVA is calculated by working out the net monthly income of each individual and deducting monthly outgoings for necessities such as food, clothing and household items. Primary utility bills such as rent/mortgage, gas, electricity are also included.
An IVA will leave you enough money to allow you and your family to cope from day to day but it is highly unlikely that you will be able to afford luxuries such as holidays abroad, costly home improvements or a new car, whilst you are making your repayments.
The most well-known IVA allows the debtor to pay consistent monthly payments over a period of five years. These sums include the insolvency practitioner’s fee. Paying for an IVA through your monthly plan is a much easier way to settle any outstanding debt. Unlike bankruptcy, you will not incur any upfront fees prior to your IVA being set-up or any court fees.
Each creditor is looking for an acceptable sum of money per month in order to retrieve their losses. Therefore, it is customary for each company to refuse anything less than 30 – 40% of your original balance.
Beware of any debt management companies who charge upfront fees as this is not common practice, and be sensible when choosing a debt management company. Check that all fees are included in your monthly repayments.
IVA and Bankruptcy News posted on 30/05/2007 15:48:20
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