Fees
IVA Fees
In an IVA, a licensed Insolvency Practitioner (IP) assigned to your case will first act as Nominee and then Supervisor, drawing a fee for both services. The level of fees we propose depend on your individual circumstances and the level of the Nominee's and Supervisor’s fees and expenses will be detailed in your IVA proposal. These fees may be calculated as a percentage of contributions paid by you, or as a fixed fee or on a time cost basis. It will be for the creditors to decide the basis and amount of such fees.
The fees will be payable from the monthly contributions that you make. We do not charge upfront fees.
Your creditors will decide whether our fees are reasonable and they can reduce our fees at the meeting of creditors. In effect it is your creditors who take the burden of the fees because the fees reduce the amount that creditors receive but the amount you pay into the IVA stays the same.
Nominee's fee
This is a fixed fee to cover the set up costs of the IVA and assistance with the preparation of the proposals:
- Preparation of your IVA proposal.
- Convening and holding the creditors meeting.
Supervisor's fees
The Supervisor's fees will cover the ongoing supervision and maintenance of your IVA for the agreed term (usually 5 years). Your IP along with suitably qualified members of their staff will undertake some or all of the following;
- Regular reviews of your IVA
- Preparing and sending statutory reports to your unsecured creditors
- Agreeing the level of your unsecured debts
- Making payments (paying dividends) to your creditors in accordance with the terms of your agreed IVA proposal
- Liaising with your unsecured creditors
- Liaising with you whenever you have any questions
- Re-assessing your circumstances if they change during the term of the IVA, and reporting this to creditors where necessary
- Annually assessing your income and expenditure
- Generally ensuring that the IVA runs satisfactorily for you and for your unsecured creditors
- After the Nominee's fee has been paid, a percentage of each monthly payment will be taken as supervisor's fees, as detailed in your IVA proposal.
Here's an example of the fees and payments on a typical IVA:
Based on unsecured debts of £35,000
Based on a monthly contribution of £350
Total paid over 60 months: £21,000
Typical Nominee's Fee agreed by creditors: £1,750
Typical Supervisor's Fee agreed: £2,900.
Disbursements (expenses) incurred by Nominee and Supervisor: £200
Return to creditors: 46 p in the £1
We will always tell you what fees are involved and how they are calculated before you commit to an IVA.
Note: It is essential that you keep up with your agreed monthly payments into your IVA. If at any point during the term of your IVA you feel you can no longer afford the payments agreed, you must contact your IP or their staff to discuss.
Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, IVAs do provide an element of flexibility, you may be allowed to payment break if you come up against unexpected costs (such as essential home repairs), or the IP may be able to request that creditors agree to amended terms that suit your change of circumstances.
If you fail to keep up with your agreed payments and do not contact your IP to discuss this, your IVA may fail, leaving you liable for payment of your unsecured debts at their original contractual payment level and in some cases you may be liable for the payment of the outstanding IVA fees. If a further meeting of creditors is needed to vary the terms of your IVA, we may ask your creditors for permission to draw an additional fee to cover our costs.
The fees on our Debt Management Plan (DMP) fall into two categories;
• Initial Fee - this is calculated at 45% of your monthly payment and is deducted from the first three months payments into your Debt Management Plan. This money is not paid to your creditors. Our initial fees will be deducted from your monthly contribution before a distribution is made to your creditors.
• Management Fee - this is deducted from your monthly contribution before a distribution is made to your creditors. This is calculated at 15% of your monthly payment where a minimum fee of £25.00 will be charged. Your monthly Management Fee will start from your first month from entering into your DMP with RSM Tenon Debt Solutions.
• Total Fees - For the first three months is 60%
Many Debt Management companies delay making payments to creditors while they collect their fees. This means it can be several weeks, or even months, before creditors receive any payment. This can put you under considerable pressure from your creditors and actually make your situation much worse.
It is our priority at Goodbye2Debt.com to make sure that your creditors receive payment from you at a level you can afford from the first month you make payments to us. We do this by spreading our initial fees over the first three months of your DMP. This reduces creditor pressure from the first month.
What our fees cover
The "Initial Fee" covers the costs of setting up your Debt Management Plan, this includes;
• Preparation and completion of your Draft Financial Statement
• Carrying out a review of your case once you have returned the information we have requested
• Preparation of your Financial Statement and payment schedule to your creditors
• Negotiation of reduced payments with your creditors including agreeing suspension of interest and charges, where possible
• Distribution of token payments to your creditors from your very first payment into your DMP to reduce creditor pressure
• Appointment of a Personal Case Handler to ensure someone is available at the end of the phone to answer any questions you may have
We give you a fourteen day ‘cooling off’ period so that you have enough time to fully consider your decision. If you decide that you do not want to proceed within fourteen calendar days from the day we receive your first payment, we will refund any payments you have made.Your “Initial Fee” is not refundable outside of our 14 day cooling off period.
The monthly “Management Fee” covers the ongoing maintenance of your DMP, this includes;
• Distribution of your monthly payment to your creditors
• Dealing with creditor correspondence and calls on your behalf
• Providing you with a monthly statement detailing all payments to creditors after deduction of our fees
• Completion of 6 monthly reviews with your creditors
• Completion of an annual review of your case to ensure DMP is still appropriate in your circumstances
• Allocation of your Personal Case Handler who is available to answer any queries you may have regarding your DMP and finances
Here's an example of the fees and payments on a typical DMP:
Based on unsecured debts of £20,000
Based on a Monthly payment of £250.00
Initial Fee (deducted for first 3 months): £112.50
Monthly Management Fee : £37.50
Estimated* length of DMP : 8 years
Total fees charged over estimated period : £3,937.50
*This is based on the assumption that interest and charges remain frozen for the life of the DMP and payments are made to RSM Tenon every month, without any delays.
If at any time you feel that you are struggling to afford your agreed monthly payment, we can review this with you, and where necessary renegotiate with your creditors on your behalf. We can renegotiate with your creditors - they may agree to accept smaller payments if it looks like the best way of bringing your debt management plan to a successful conclusion.
Debt Relief Order Fees
Debt Relief Orders are available through a limited number of approved intermediaries such as the Citizen’s Advice Bureau. We do not currently offer DROs but we will advise you if this is your best option and direct you to an intermediary. We do not charge for this service. Intermediaries charge a flat fee which is currently £90.
Bankruptcy Fees
We can assist you with petitioning for your own bankruptcy. We charge £540 for a sole case and £720 for a joint case (including VAT) for this service. You must pay the additional court fee and deposit yourself, currently £700 per person (subject to some concessions).
Trust Deed Fees and outlays (Scottish Residents only).
All fees and outlays incurred during the administration of your Trust Deed are met from the realisations made from your income contributions and/or assets. You do not have to pay additional fees or charges.
Trustee’s fees:
Your Trustee’s fee will be determined on a time and line basis i.e. the Trustee will make an appropriate charge for the time spent administering your case. In a typical Trust Deed lasting three years with an income contribution and no assets this will amount to approximately £4,000 plus VAT.
The estimated total fee will be advised to creditors in the Trust Deed proposal. The actual fee will be drawn by your Trustee on each anniversary of the Trust Deed (funds permitting) and is subject to approval by you and your creditors. If you or your creditors are unhappy with the level of the fee then you are able to request an audit of the fee by the Accountant in Bankruptcy (the government agency who supervises Trust Deeds in Scotland). The Accountant in Bankruptcy will then complete their audit and charge a statutory fee of 5% of any fees and outlays fixed for auditing such accounts, thereby reducing the funds available for distribution to creditors.
The fee is based on the following work being required to setup your Trust Deed and administer it through to its’ conclusion. Your Trustee along with suitably qualified members of his/her staff will undertake these tasks (this list is not exhaustive);
• The required number of meetings (at your home, our office or another suitable place) to give you ‘best’ advice prior to you deciding a Trust Deed is the appropriate debt solution for you.
• Preparation of the Trust Deed proposal.
• Complete the necessary work to have your Trust Deed registered as ‘protected’.
• Liaising with you, your creditors, the Accountant in Bankruptcy and any other third parties relevant to your case e.g. property surveyors, secured creditors etc.
• Monitor payment of your monthly income contributions.
• Realise any assets with a value to your Estate.
• Re-assessing your circumstances if they change during the term of the Trust Deed and reporting this to creditors where necessary.
• Conduct an annual review of your income & expenditure.
• Send an annual report to your creditors updating them on the progress of your Trust Deed.
• Adjudicate on creditors’ claims.
• Pay a dividend(s) to your creditors.
• Generally ensuring that the Trust Deed performs satisfactorily for you and for your unsecured creditors.
• Complete the necessary work to grant your dischargee discharge from the Trust Deed
• Complete the necessary work to grant the Trustee’s discharge from the Trust Deed
Trust Deed outlays:
Every Trust Deed also has the following outlays to pay:
• Edinburgh Gazette notice - £47 plus VAT
• Registers of Scotland - £30
• Bordereau insurance - £54 plus VAT (may vary dependent on value of realisable assets, assuming no more than £25,000)
• Accountant in Bankruptcy registration fee - £36
• Accountant in Bankruptcy supervision fee - £250
As such, the following is an example of the costs of a typical Trust Deed:
Based on unsecured debts of £30,000
Based on monthly contributions of £300, no assets
Total paid over 36 months: £10,800
Typical Trustee’s fee (agreed by creditors): £4,000 (plus VAT)
Typical outlays: £434
Pence in the £1 received by creditors: 18.9p in the £1
Amount of debt written off: £24,334
Note: It is essential that you maintain your agreed monthly contributions into your Trust Deed. If at any point during the term of your Trust Deed you feel you can no longer afford the payments agreed, you must contact your Trustee or their staff to discuss.
Contacting us to discuss any payment difficulties you are experiencing or changes in circumstances is essential, Trust Deeds do provide an element of flexibility, you may be allowed to have a payment break if you come up against unexpected costs (such as essential home repairs) or your Trustee may be able to review and amend your contribution to suit your changed circumstances.
If you fail to keep up with your agreed contributions and fail to contact your Trustee to discuss, your Trust Deed may fail, leaving you liable for payment of your unsecured debts at their original contractual payment level and in some cases you may be sequestrated (made bankrupt) by your Trustee for failing to comply with the terms of your Trust Deed.