What we charge & why

• Debt Management Plan (DMP) Fees
• IVA Service and Individual Voluntary Arrangements (IVA) Fees
• PTD Service and Protected Trust Deed (PTD) Fees

Bankruptcy Information

Fees apply for the Bankruptcy Support Service, which is provided by our sister company, Baker Evans Limited.

Debt Management Plan (DMP) Fees

Our DMP fees are in two parts:

1. An Initial Fee – this is calculated from the financial information provided to us in the application process and is equivalent to the first two months payment to the plan.

This fee is used to help cover our initial costs in collecting and reviewing your documentation; for setting up your monthly payment plan; and for our professional services in liaising with your creditors. The Initial Fee is retained by us and will not be distributed to your creditors and can be paid in two separate installments.

2. A Management Fee – this is the Fee payable for our Services each month and is to cover the cost of administering payments to creditors, dealing with queries from them and providing our professional services to you. It is an amount equal to 17.625% of your Monthly Payment (apart from your first two Monthly Payments which is the Initial Fee) this will be at least £35 and no more than £100. This fee is used to cover the ongoing work involved in managing your DMP and includes distributing funds to creditors on your behalf: dealing with phonecalls and letters to and from your creditors; compiling detailed payment statements which we will send to you on a regular basis; and any help or advice you require whilst the DMP is in progress.

Each year we complete an annual review. We will review each debt and may contact creditors to ensure the information we hold is updated. We will also review whether the information we hold in relation to your circumstances is up to date, and identify how you may be able to pay off your debts more quickly. The management fee that we take for that month shall be increased by £40 as our annual review fee. This does not affect the agreed monthly payment to us but will affect the payments that we make to creditors.

(A detailed estimate of the fees payable will be provided to you prior to starting a DMP)

IVA Advisory Service and Individual Voluntary Arrangements (IVA) Fees

For Baines & Ernst to provide the IVA Advisory Service there will be an IVA Advisory Service fee. This is calculated from the financial information provided to us in the application process and is broadly equivalent to 2 months of your calculated disposable income.
This payment will be used to help cover our costs in assessing your financial position, reviewing your documentation and for our professional services and for passing your case to the Insolvency Practitioner. The IVA Advisory Service Fee is retained by us and will not be allocated towards your IVA or paid to your Creditors and can be paid in two separate instalments. A copy of our IVA Advisory Service Terms and Conditions can be viewed here.

IVA Fees (Insolvency Practitioner)

Once your case is passed across to the licensed Insolvency Practitioner, all the costs associated with your IVA (as relevant) are included in the payments you make in to it.

There are two kinds of fee involved in an IVA – the Nominee fee and the Supervisor fee. Please see below for an illustration of the fees and payments on an example client’s IVA.

You will be informed separately in the IVA proposal from the Insolvency Practitioner of the proposed fees, tailored to your personal circumstances before you have to commit to an IVA. IVA fees are variable dependent upon the monthly contribution to the arrangement and the agreement that is reached with your creditors. Fees are included as part of your monthly contributions.

Example based on a typical (average) customer, with approx. £31,000 of unsecured debts who completes an IVA lasting 5-years and has no equity in a property.

A breakdown of typical payments and fees on an IVA:

Nominee’s fee

This is a fixed fee and is decided by your creditors. It will cover the work that goes into setting up your IVA – a process which includes:

• Drawing up your IVA proposal. This is the document which must be approved by enough of your creditors for your IVA to start. It defines the proposed terms of the IVA including how much you would pay and what each creditor would receive, etc.
• Setting up the creditors meeting. At this meeting your creditors will decide whether to formally approve your IVA proposal, reject it, or request changes to it.
• Assessing any suggested changes. If any creditors have requested changes to your IVA proposal, your Insolvency Practitioner will advise you on whether you should accept those changes – or consider a different approach to your debt problems.

Depending on the agreed terms of your IVA proposal, your first monthly payments will go towards paying the nominee’s fee before your creditors receive any money. 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.

Supervisor’s fees

The supervisor’s fees will cover the ongoing supervision and maintenance of your IVA up until completion of the IVA.

• Your Account Manager will deal with any day-to-day issues that arise, ensuring your IVA runs smoothly.
• Your Insolvency Practitioner will carry out regular reviews of your IVA and address wit you any more serious issues that come up – if, for instance, your financial situation worsens, and you need your Insolvency Practitioner to arrange an IVA variation to the terms of your IVA.

Supervisor’s expenses

The supervisor’s expenses will cover the necessary legal and administrative costs which are incurred by the Insolvency Practitioner in implementing the arrangement in line with the terms of the IVA. For example bonding fee and postage costs.

PTD Service and Protected Trust Deed (PTD) Fees

For Baines & Ernst to provide the PTD advisory service there will be an Administration Payment. This is calculated from the financial information provided to us in the application process and is broadly equivalent to your disposable income.

This payment will be used to help cover our costs in collecting and reviewing your documentation and for our professional services in liaising with your creditors and for passing your case to the Insolvency Practitioner. The Administration Payment is retained by us and will not be allocated towards your PTD or paid to your Creditors and can be paid in two separate installments. A copy of our  Terms of Business can be viewed here.

PTD Fees (Insolvency Practitioner)

Once your case is passed across to the Insolvency Practitioner of our choice you will be informed separately in writing from the Insolvency Practitioner of the proposed fees for the Trust Deed, tailored to your personal circumstances before you have to commit to a Trust Deed. The trustee’s fees and the costs of administering your Trust Deed will be estimated by the trustee and advised to all creditors when they are notified of the Trust Deed. They will be deducted from the agreed contribution and proposed asset realisations prior to any payment being made to creditors.

Fees incurred for Trust Deeds are variable dependent upon the monthly contribution to the arrangement and the agreement that is reached with your creditors. All the costs associated with your PTD (as relevant) are included in the payments you make into it.

Please see below for an illustration of the fees and payments on an example client’s PTD.

Example based on a typical (average) customer, with approx. £23,000 of unsecured debts who completes a Protected Trust Deed lasting 3 years and has no equity in a property.

A breakdown of typical payments and fees on a PTD:

The fees charged will not affect the actual amount you will be required to pay to the PTD, but will come out of the monthly payments which you can realistically afford to make to the PTD and which will be agreed with your creditors. The size of those payments will depend on the value of your assets and the size of your disposable income.

The fee the Insolvency Practitioner will take will cover both the work involved in setting up the Trust Deed and the ongoing supervision and maintenance of the agreement: This fee will be calculated at the start of the agreement, when the terms of the Trust Deed are determined: the appointed IP will draw up your Trust Deed proposal (which tells creditors what they can expect from the Trust Deed) and present it to your creditors.

Settlements

We will charge you a Settlement Fee to cover our costs. This fee is payable for our Services in negotiating with your creditors and to cover the cost of administering payment to creditors, dealing with queries from them and providing our professional services to you. This fee is calculated as 25% of the amount we save you on your total debt (subject to a minimum of £250).