April 2024
Will an IVA Affect My Partner in April 2024
If you or your partner are struggling with debt, you will know how difficult it can be for a marriage or for a family. Like debt itself, debt solutions can also have a significant impact on your partner. If you are considering taking out an Individual Voluntary Arrangement (IVA) or any other formal debt solution, it is essential to be aware of how this could potentially affect your partner.
One of the main ways in which an IVA can affect your partner is if they are named on any of your joint accounts. This means that if you have a joint bank account, credit card or loan, your partner’s name will also be on the agreement. If you enter into an IVA, your partner will be liable for any of the debt that is owed on these accounts.
This can result in a large amount of financial pressure on your partner, and it may mean that they have to make some difficult choices in order to keep up with the repayments.
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You should always seek impartial money advice before making any significant decisions about your financial future.
What is an IVA?
An IVA or Individual Voluntary Arrangement is a formal agreement taken out between you and your creditors to support you to repay your debts over a set period of time. IVAs are designed to help people in repaying their unsecured debts (i.e. credit cards, overdrafts, store cards, payday loans).
Once you have entered into an IVA, your creditors will generally freeze any interest or charges that have been applied to your debt, and they will also agree to accept lower payments each month.
How long does an IVA last?
An IVA typically lasts for five years, although this can be extended in some cases. At the end of the five years, any remaining debt will be written off, and you will be left debt free.
Do I have to disclose to my partner about my IVA?
You are not legally required to tell your partner about your IVA or any other debt solutions, but it is generally advisable to do so. This is because an IVA will have a significant impact on your finances, and it is, therefore, likely to affect your partner’s life too. Furthermore, creditors will want to see what your partner earns and what household expenses your partner pays for.
There is also always a risk that your partner may find out about your IVA from your creditors or from other sources, such as a credit report. Once approved, the details of your IVA will also be recorded on the Insolvency Register, which is a public record.
How will my partner be affected if I take out an IVA?
- If you have a joint account with your partner, this will be affected by your IVA. This is because your creditors will have a legal right to take payments from these accounts to repay your unsecured debts. This could leave your partner short of money, and it could also affect their credit score.
- If you are married, your spouse may also be liable for your debts if they are named on any of the accounts that you are using to pay off your debt. This means that if you default on an IVA payment, or if the IVA is not successfully completed, your spouse could be pursued for the outstanding debt.
- Once an IVA has been set up and the debtor is paying a lower figure, it could mean that their partner is better off as they are no longer subsidising all essential living costs, i.e. the debtor is now able to pay their fair share.
- Aside from the financial impact, an IVA could have a mental and emotional impact on your partner, too: they may feel stressed and anxious about the situation, and they may also feel that they have to take on more responsibility for the household finances.
- If your partner is a guarantor for any of your debts, they will also be affected by your IVA. This is because a guarantor is legally responsible for repaying the debt if you default on payments.
- If you are in debt, you could be asked to release equity from your home. This means that you would have to sell your home, or take out a second mortgage, in order to repay your debts. If you are married, both you and your spouse will need to agree to equity release before it can go ahead.
If you are considering taking out an IVA, it is crucial to speak to your partner about this first. This will help to ensure that they are aware of the potential implications, and it will also allow you to discuss how you will manage your finances during the IVA period.
You should also seek professional advice or free debt advice from a service such as MoneyHelper (an independent service set up to help people manage their money) before entering into an IVA, as this is a serious debt solution which could have a significant impact on your financial future.
Will my partner be required to contribute to my IVA?
Your partner will not usually be required to contribute to your IVA, but they may be asked to do so if your creditors believe that they can afford it.
If your partner is named on any of the accounts that you are using to pay off your debt, they may also be liable for the debt if you default on IVA payments. This means that if you miss monthly payments or if the IVA is not successfully completed, your partner could be pursued for the outstanding debt.
Will I still be able to contribute to the household if I start an IVA?
If you are named on any of the accounts that you are using to pay off your debt, your creditors will have a legal right to take payments from these accounts to repay your debts. This could leave you short of money, and it could also affect your partner’s credit score.
If you still want to contribute financially to, for example, household bills, you ought to speak to your partner about this first. This is because they will need to agree to any changes in the way that you manage your finances.
You should also seek professional debt advice before entering into an IVA, as this is a serious debt solution which could have a significant impact on your financial future and on your income.
"An IVA or Individual Voluntary Arrangement is a formal agreement taken out between you and your creditors to support you to repay your debts over a set period of time. IVAs are designed to help people in repaying their unsecured debts (i.e. credit cards, overdrafts, store cards, payday loans)."
Will my partner’s credit rating be affected if I start an IVA?
Your creditors cannot mark the credit file of your partner as a result of your financial activities.
While credit reference agencies do not associate people living at a shared address as automatically having a financial association, if you have a joint account or joint debts with your partner, these will be affected by your IVA. This is because your creditors will have a legal right to take a monthly payment from these accounts to repay the money you owe. This could leave your partner short of income, and it could also affect their credit rating.
You could consider taking out a joint IVA with your partner, as this will protect their credit history long-term and ensure their ability to obtain credit in the future.
Alternatively, it can sometimes be possible to sever the financial link that exists between you and your partner by making an application for a Notice of Disassociation, but this would only be helpful if you were to also close any joint bank accounts youa have or a joint loan that is not a mortgage.
You should also make sure that you keep up with all of your payments, as missed payments can damage your partner’s credit history.
Will my partner be able to get a mortgage if I have an IVA?
It is unlikely that your partner will be able to get a mortgage if you have an IVA. This is because lenders will usually only offer mortgages to people who have a good credit history, and an IVA will damage the record kept on your credit file.
If you are married, your spouse may also be liable for your debts if they are named on any of the accounts that you are using to pay off your debt. This means that if you default on payments or if the IVA is not successfully completed, your spouse could be pursued for the outstanding debt.
How is a jointly owned property affected by an IVA?
If you own a property jointly with your partner, your creditors may try to force the sale of the property in order to repay your debts. This could have a significant impact on your partner, as they could be left homeless.
You should also make sure that you keep up with all of your mortgage payments, as missed payments could lead to your partner losing their home.
What happens if your partner has their own Debts?
If your partner has their own debts, these will not be affected by your IVA. However, if you have a joint account with your partner, this will be affected by your IVA. This is because your creditors will have a legal right to take payments from these accounts to repay your debts. This could leave your partner short of money, and it could also affect their credit score.
What if my partner and I are separated?
If you are separated from your partner, they will not usually be liable for your debts. However, if you are named on any of the accounts that you are using to pay off your debt, your creditors will have a legal right to take payments from these accounts to repay your debts. This could leave you short of money, and it could also affect your partner’s credit rating.
If you are going through a divorce, you should get impartial advice from a solicitor to find out how your IVA will affect your financial settlement.
What if we break up during the IVA?
If you break up with your partner during the IVA, you should speak to your IP about this. They will be able to advise you on how to proceed. It is important to remember that even if you break up with your partner, you are still liable for the debt. This means that if you default on payments or if the IVA is not successfully completed, your ex-partner could be pursued for the outstanding debt.
What if my partner refuses to disclose their income and expenditure on the IVA forms?
When you take out an IVA, the total household income/outgoings of both you and your partner usually need to be disclosed to your IVA provider.
If your partner is refusing to disclose their income and expenditure on the IVA forms, you should speak to your IP about this. They may be able to get information from your partner’s employer or from other sources.
Your partner’s income and expenditure need to be taken into account when your IVA payments are calculated. If they are not disclosed, this could mean that your payments are too high or too low.
Is an IVA the best debt solution for someone married or in a partnership?
An IVA may not be the best solution for someone married or in a partnership. This is because it could have a significant impact on your partner, and it could also affect your financial settlement if you are going through a divorce. It is important to remember that an IVA is a legal agreement, and if you default on payments or if the IVA is not successfully completed, your partner could be pursued for the outstanding debt.
However, an IVA could still be a good solution for you if you are struggling to repay your debts. This is because it could help you to get your debts under control and to start fresh. If you have joint debts, then an IVA could also be a sensible way to make joint payments towards your debts.
If you are considering an IVA, you should make an insolvency appointment to get free debt help and professional advice from a qualified insolvency practitioner to find out if it is the best solution for you.
Should I explore taking out a joint IVA?
Strictly speaking, an IVA is by definition an individual arrangement; however, in situations where a couple are married or co-habiting and are both debtors (either each has debts or there are debts in joint names), then it is possible to prepare an interlocking IVA – as finances and income are clearly intertwined.
If you are considering taking out a joint or interlocking IVA with your partner, you should speak to your IP about this. They will be able to advise you on whether this is the right option for you.
You might consider a joint IVA if:
- Your partner has a good income and can afford to make the payments.
- You have joint financial accounts with your partner, and you want to protect their credit score.
- You are married, and you want to protect your spouse from being liable for your debts.
Taking out a joint IVA is not suitable for everyone, and you should speak to your IP about all of the options available to you.
What do I do if I want to pursue an IVA?
If you are struggling to repay your debts and you want to explore taking out an IVA, you should speak to a qualified insolvency practitioner licensed by the insolvency practitioners association. They will be able to give you debt help and advise you on whether this is the right option for you, your partner and for your financial circumstances.
Article author
Katy Davies
I am a keen reader and writer and have been helping to write and produce the legal content for the site since the launch. I studied for a law degree at Manchester University and I use that theoretical experience, as well as my practical experience as a solicitor, to help produce legal content which I hope you find helpful.
Outside of work, I love the snow and am a keen snowboarder. Most winters you will see me trying to get away for long weekends to the slopes in Switzerland or France.
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Frequently Asked Questions
How long does an IVA last?
An IVA typically lasts for five years, although this can be extended in some cases. At the end of the five years, any remaining debt will be written off, and you will be left debt free.
Will my partner be required to contribute to my IVA?
Your partner will not usually be required to contribute to your IVA, but they may be asked to do so if your creditors believe that they can afford it.
What happens if your partner has their own Debts?
If your partner has their own debts, these will not be affected by your IVA. However, if you have a joint account with your partner, this will be affected by your IVA. This is because your creditors will have a legal right to take payments from these accounts to repay your debts. This could leave your partner short of money, and it could also affect their credit score.
What if we break up during the IVA?
If you break up with your partner during the IVA, you should speak to your IP about this. They will be able to advise you on how to proceed. It is important to remember that even if you break up with your partner, you are still liable for the debt. This means that if you default on payments or if the IVA is not successfully completed, your ex-partner could be pursued for the outstanding debt.
