The Best IVA Advice for Joint Debts (by Andrea Simpson)

More often than not a couple may experience some form of joint debt. Although it may be convenient to try and bundle all the joint debts into an IVA it is not always that straightforward.

If a couple have joint debts, then they are both liable for the whole amount of the joint debt, even if only one partner proceeds with an IVA. All that will happen is the joint creditors will chase the other partner for the full outstanding balance as the partner is also a joint account holder and his equally responsible in clearing the debt(s).

It is also not possible for one partner's IVA to remove the other partner's liability for the joint debts, nor is it possible, in fact legally, to have a "joint IVA", which lumps all the outstanding debts together. Assuming the IVA criteria is met what actually happens will depend on how much debt the partner has, as part of the final calculations.

If the partner is only liable for a nominally small amount of debt, including joint, around £10,000 or under, then they won't be able to start an IVA in their own name; as the cost of such an IVA would be completely disproportionate to the amount of debt owed. In this instance, an IVA can be put forward an in the principle debtors name, but also bear in mind that monthly household budgets will have to allow for the non-IVA partner to continue making their existing monthly debt payments (including that on the joint debts) in full. This may still leave a situation where there is not enough budget left over to meet the IVA payments. If the payments are still too high, then the non-IVA debtor could enter into a debt management plan to reduce debt payments, and of course still have to end up pay the outstanding debts in full.

If it is for a large amount of debt, say over £10,000, then both partners can enter into IVA's together. Now these will be linked together so that you can't have a situation where one partner's IVA gets approved and the other's is rejected, both have to be approved or it's not on. The costs of running two domestic partners' IVA's are around 50% higher than those of a single IVA, so while the minimum payment for a single IVA is £300 per month, for two IVA's the household will have to have a minimum of £450 per month available. And given the number of IVA options available to consumers it is not always easy or straightforward to find the best IVA.

Conclusion

The whole IVA market is now filled with scores of debt management companies. Some of these deal only with small amount debt help while other only specialise in IVA debt management. Whatever option you decide upon and if the decision is take out an IVA then with the right help you should have no problem in finding the best IVA.

Andrea Simpson is an online financial expert who provides the best IVA program advice including help on debt management, bankruptcy and IVA’s.