Will An IVA Affect My Partner Or Spouse?

Author Name Chris Richards Article date May 11, 2023

An IVA, or Individual Voluntary Arrangement, is a debt solution available to England, Wales, and Northern Ireland residents. It offers a way to clear unsecured debts through manageable monthly payments, typically lasting five years but possibly extending to six years in certain circumstances.

Looking to apply for an IVA?

Looking to apply for an IVA?

We recommend thoroughly researching and understanding the implications of entering into an IVA, including its potential impact on those closest to you, such as a partner or spouse.

This guide will provide insights into how an IVA may affect your partner, whether you enter into an individual or joint arrangement. We will ensure that you are well informed about the potential consequences and can decide whether an IVA is the right choice for your financial situation.

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Can I get a joint IVA with my partner?

In contrast to some alternative debt solutions, Individual Voluntary Arrangements (IVAs) are specifically tailored to assist individuals in managing their personal debts. As a result, obtaining a joint IVA for shared debts with your partner is not an option.

Nevertheless, an interlocking IVA can be considered, which involves administering two distinct IVAs, yet consolidating them into a single monthly payment. This approach may be suitable if you or your partner’s debt levels are insufficient for separate IVAs.

At IVA Helpline, we also acknowledge that a joint loan can be incorporated into a personal IVA. However, it is important to note that both parties will remain accountable for settling the debt. Consequently, after writing off a portion of the debt during your IVA, your partner will be responsible for repaying the remaining balance.

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Does my partner have to contribute to my IVA?

Whether the debt is solely yours or shared with your partner, you will be the only one responsible for making monthly IVA payments, and your partner will not be required to contribute.

However, in the case of an interlocking IVA, your partner must contribute to the monthly payments for the arrangement to succeed. It’s important to note that if you separate from your partner during an interlocking IVA, the entire arrangement may fail, but you will still be expected to repay the remaining balance.

Therefore, it’s crucial to consider the long-term impact of the debt solution you choose before proceeding.

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Our trained advisors are here to help, so if you think an IVA proposal is one of the best debt solutions for you, don’t hesitate to call us on 0800 464 7235 to speak to one of our trained debt advisors or click below to see if you qualify…

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Will my partner become responsible for household bills when I enter an IVA?

Upon entering an IVA agreement, your monthly payments are tailored to suit your financial capacity. If you share a household with a partner, an income and expenditure assessment will be conducted to determine the appropriate payment amount. This process involves deducting your and your partner’s total household expenses from your combined monthly income.

As the IVA payment is calculated in this manner, you can confidently manage both daily and monthly expenses prior to accounting for your IVA payment. Consequently, your partner is not burdened with the responsibility of covering household bills.

However, if your partner earns more than you, they may be required to contribute more towards household expenses. This possibility will be identified during the income and expenditure assessment and thoroughly explained to both parties before initiating payments.

Will my partner’s credit be affected by my IVA?

In the past, financial associations were automatically established by credit reference agencies for individuals residing at the same address. As a result, a poor credit rating of one person, such as your spouse, could negatively impact your own. Fortunately, this is no longer applicable.

When entering an Individual Voluntary Arrangement (IVA), it will be recorded on your credit file for a duration of six years from the date of approval. This will decrease your credit rating, making it more difficult for you to secure credit.

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Joint Financial Accounts and Their Impact on Your Partner’s Credit

The only circumstance in which your partner’s credit might be affected is if you both have joint financial accounts. Examples of this could be a shared bank account or joint debts included in your IVA, such as a combined loan or overdraft.

Since this creates a financial connection between you and your partner, your IVA may also impact their credit rating.

Do I have to inform my partner of my IVA?

While there is no legal obligation to disclose your Individual Voluntary Arrangement (IVA) to your spouse or partner, being transparent about your financial situation can ease the process.

At IVA Helpline, we understand that discussing debt can be challenging, particularly if your partner is unaware of your financial issues. Nevertheless, open communication can provide much-needed support during this trying period.

When entering into an IVA, your Insolvency Practitioner (IP) may request a comprehensive breakdown of your household expenses. In such cases, your partner’s assistance can be invaluable.

Remember, third parties will not share any information about your IVA with your spouse or partner, so it is up to you to maintain honest communication with them. Doing so allows you to navigate the IVA process more effectively and feel supported.

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Will the home I own with my partner be affected by my IVA?

As the sole homeowner, releasing equity from your property might be necessary when entering into an IVA agreement. However, if the property is co-owned with your partner, both parties will be affected, and the entire property will be subject to the arrangement.

Discussing the IVA terms with your partner before committing to any debt solution is crucial. While it may not seem significant initially, addressing this issue can prevent future complications, such as your partner’s refusal to release equity, leading to the failure of your IVA.

We understand the importance of clear communication and informed decision-making at IVA Helpline. By ensuring that both you and your partner are aware of the potential consequences of an IVA, we aim to provide accurate and reliable guidance throughout the process.

Do I need to remortgage my property to settle my IVA early?

As a homeowner, you are not required to wait until the fifth year of your IVA to release equity; you may opt for remortgage at an earlier time to settle your agreement more quickly.

Typically, this alternative is available only if a third party can contribute a lump sum payment.

However, if you can remortgage your property, these funds can also be directed towards your IVA. It is crucial to conduct thorough research before choosing to remortgage and to explicitly state that the funds will be utilized for early IVA settlement.

Failure to disclose this information may result in the released funds being treated as a windfall payment, leading to the potential loss of the funds.

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Where can I get more advice on IVA’s and the debt help available?

Explore your financial options and receive the assistance you need to manage your debt effectively by reaching out to IVA Helpline by clicking on the check if you qualify button today.

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