Thinking of applying for a joint Individual Voluntary Arrangement (IVA)? This article explains what a joint or interlocking IVA is and if you can get one to manage you and your partner’s debt.
What is an Interlocking IVA?
An IVA is a proposal from one person to their creditors. If there are two people who are financially linked then it may be that both of them need to propose an IVA to their sole and joint creditors. This would require 2 IVA proposals to be written. If they are proposed at the same time, each one containing the common, joint financial statement, each depending on the success of both proposals, they are referred to as an interlocking IVA.
Can I get a joint IVA for my debts?
A joint IVA may be a good solution if you and your partner/spouse both have debts. With a joint IVA, you can make one monthly repayment to your creditors for both you and your partner’s debts. The benefit of a joint IVA is that it will take into account any joint expenses and assets. It will also consider both you and your partner’s income in the proposal.
However if together you both have debts of over £5,000 then you may want to get an individual IVA. Also please note that if your partner’s proposal is rejected, this will mean that your proposal will also be automatically rejected.
What happens to a joint IVA after separation?
If you have a joint IVA with your partner or spouse, this means that they are interlocking (as described above). If you separate, this could affect your joint IVA in different ways depending on how you separate. In some cases, the break up will have no impact on your joint IVA. For example, if you separate and move houses, but both parties are still willing to continue with the Joint IVA. Another case may be that the Insolvency Practioner (IP) could look into a variation of your joint IVA. For example, your IP may suggest splitting the joint IVA into two separate ones. This would have no impact on the progress of the IVA, as you will continue from where you are.
Please note if the break up is severe, an IVA may no longer be the best debt solution for you. In this case, you must speak to your IP for further information and debt help.
Can I get a mortgage if I’m on a joint IVA?
An IVA can only be entered into by an individual, so you may need to clarify whether it is you, the other person or both of you that has an IVA. In short, you will really struggle to get a mortgage whilst in an IVA and doing so may even breach the terms of the arrangement. If it is just another person who has an IVA you should not have any problems getting a mortgage, apart from any normal credit restrictions depending on your circumstances.