Can I do a joint IVA

You and your partner can do a joint IVA.

Find out how to set up the Arrangement and if you actually need to have a joint debt. Understand how the monthly payments work and your options if you split up while it is in place.

Need more specific advice or want to get started. Get in touch with us today.

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Is it possible to have a joint IVA?

You can do a joint IVA to include both you and your partner’s debts.

Technically speaking – the agreement is not a joint IVA. It is actually two separate interlocking IVAs.

The way this works is as follows: You both start an individual IVA at the same time but there is a link between the agreements.

So there are actually two agreements. However both are based on the same household income and expenses budget including both your incomes and combined living expenses.

One combined monthly payment

You only have to make a single monthly payment which covers both of your IVAs.

A joint IVA is not one agreement. It is actually two interlocking IVAs.

Is a joint IVA just for couples?

A joint IVA is not only for couples.

However, you would normally only use this solution where you are living with a partner and have joint responsibilities. For example you have children together and combined living expenses.

Do you need to have joint debts to get a joint IVA?

It is not necessary to have any joint debts to get one of these Arrangements.

Where all your debts are separate, you can still interlock your IVAs using a combined income and living expenses budget and single monthly payment.

That said, if you do have one or more joint debts, these can certainly be included.

Your IVA Company will list the same debt in both your agreements. They will use the total balance in each.

For example:

Let’s say you have a joint overdraft debt with a balance of £2000 owing. You will list this debt in both your IVAs.

But remember, you both include the total balance of £2000.

You don’t split the balance in half and both list an overdraft debt of just £1000. The reason for this is that you are both equally liable for the full amount of the debt.

Including the full balance in each of your Arrangements does not mean that the creditor will get double what they are owed. They are still likely to have to write off part of the debt.  

How do you get a joint IVA

There are a number of steps your IVA company will have to go through to get your joint IVA in place.

Produce a joint Financial Statement

First you will need to produce a joint financial statement.

This document includes a list of both your debts. You will need to group each debt by person and highlight any that are joint.

You also need to provide your household income and expenses budget (and list valuable assets such as your car and if you own a property).

Your budget should show both of your incomes and all of your combined living expenses. The totals of these are used to calculate your total surplus income.

We can help you with your financial statement. Call us for advice and assistance with the application process.

Generate two IVA proposal documents

The IVA Company you work with will then generate two IVA proposals – one for each of you.

Each proposal includes your individual debts and any joint debts.  

They will use the same combined income and expenses budget in each document and show a total surplus income figure.

Creditors accept the joint IVA

Both IVA proposals have to be accepted by the respective creditors.

Once both are accepted, you start making a single monthly payment based on your household surplus income figure.

Your IVA company simply splits the payment between both Arrangements. This is done on a pro rata basis with relation to the percentage of the total income each of you contributes.

Once accepted, the two agreements are known as a joint IVA. However the correct term is they are two interlocking IVAs.

What if you split up during your joint IVA?

A standard monthly payment IVA will last for 5-6 years. During this time, your circumstances can change. For example you might split up from your partner.

If you split up when you have a joint IVA, it is possible to separate your two Arrangements. This would mean that you can then both carry on with your own agreement.

You will each need to complete a new income and expenses budget based on your separate circumstances. In other words, you no longer used a combined budget.

As long as each of you has sufficient surplus income to maintain a sensible payment into you own IVA, your agreement can continue.

What if you can’t afford to pay your IVA on your own?

If you can’t afford to maintain the required minimum monthly payment on your own, your only option might be to let your side of the IVA fail.

Where you find yourself in this situation, you will need to consider using an alternative debt solution to manage your debt from now on.

Depending on the amount you owe and your other circumstances, you could start a Debt Management Plan or look at the option of going bankrupt.