Do I have to pay towards my Partners IVA

15/03/2023
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Do I have to pay towards my Partners IVA

Under the law you cannot be forced to pay someone else’s debt. However you may still have to pay towards your Partners IVA.

Included in this article:

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Will you have to pay into your Partners IVA?

If your partner wants to start an IVA they will have to disclose your income during the application. This is because the total household income must be considered when calculating how much they will have to pay into their Arrangement each month.

Their payment will be based on their share of the household disposable income. The split is determinated pro rata relative to the percentage of the total income you both contribute.

Your share of the disposable income is then normally yours to keep. You should not be required to pay it into your partner’s Arrangement.

Your Partner’s creditors could demand that your share of the household disposable income is also paid into their IVA if they feel you have benefited from the debt.

What if you have your own debts to pay?

You may have debts in your name which you need to continue paying. This will not be a problem as long as as you can cover the payments with your share of the household disposable income.

However where your debt payments are relatively large you may not be left with sufficient funds to pay them. In these circumstances you will need to consider reducing your payments or perhaps even using an IVA yourself.

If you have no income ongoing payments towards your debts cannot be included in the living expenses budget. This would mean your partner would be paying these over the debt in their IVA. Their creditors would not agree to this and you will need to consider a joint IVA or alternative debt solution for your debts.

Any joint debts must be included in your partner’s IVA. However you will still have to pay 100% of the outstanding balance.

Struggling to get your head round all of this? We can help. Call us (0800 011 4712) or complete the form below. The advice is free and confidential.

What happens to your share of any Home Equity?

It is very important to understand the implications of your partners IVA if you are joint home owners. Under the terms of the Arrangement they will be obliged to try and release their share of any property equity.

Your share of any equity is protected. You will not be obliged to release any of this as part of your Partner’s Arrangement. However you cannot block them from remortgaging to release their share.

If you refuse to allow your partner to release their equity this could cause their whole Arrangement to fail. As such you must be prepared to give your permission from the beginning.

You can help settle your Partners IVA early by offering to release home equity. This could be done at any time during the Arrangement.

Can you pay your Partners IVA for them?

If your partner has little or no income of their own they may not be able to afford viable IVA payments. In this situation you can make the payment on their behalf if you wish.

This situation is common in the case of a joint IVA. One party may have no income of their own and so the Arrangement is funded entirely by the other. However it can also happen where the party funding the IVA is not otherwise involved.

Alternatively if you can make a cash lump sum available you could pay for a Lump Sum Payment IVA on behalf of your partner. In this scenario ongoing monthly payments are not then required.

If your partner has no income to pay for their own IVA it may not be the best solution for them. If they do not own property Bankruptcy might be a cheaper option.

Need more assistance with an IVA? Give us a call (0800 011 4712) or complete the form below. The advice is free and confidential.

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12 thoughts on “Do I have to pay towards my Partners IVA”

    Cathryn says:
    05/04/2019 at 12:58

    Hi
    I am 5 years into my IVA with Aperture, formerly Grant Thornton. My husband, who is now ex, both signed this agreement but I am the only one who has paid the premiums. My circumstances have now changed less money etc but I have been informed it is up to me to chase my ex for contributions not Aperture. Is this correct?

    Reply
      James Falla says:
      05/04/2019 at 13:02

      Hi Cathryn

      It sounds as though you and your husband have what is commonly known as a joint IVA. In reality the IVA is not really joint. It should in fact be two IVAs (one for you and one for your husband) which are interlocking.

      If you can no longer afford the full payment and your ex will not help you need to talk to Aperture about splitting the IVAs. You then continue paying yours and your husband’s will probably fail. Aperture should be able to do this. However because you are now paying less there may be implications such as an extension to your agreement.

      I find it strange that Aperture have not suggested this straight away. Clearly it is not possible for you to chase your ex husband for money and you are not responsible for make sure he pays his IVA…..

      Reply
    Nicola says:
    05/04/2019 at 14:03

    I have been in an Iva coming up two years now but I have always been told that the Iva is based on household income rather than just my income even though the debt is in my name is this right?

    Reply
      James Falla says:
      05/04/2019 at 14:33

      Hi Nicola.

      When you start an IVA it is quite normal to calculate a household income and expenses budget. In other words take the total income of both partners and the total expenses. The total household disposable income is then calculated by deducting the total expenses from total income.

      However as highlighted in the above article legally speaking your partner does not have to pay towards your debt. As such you should only be paying your share of the household surplus into your IVA. Your partner should be allowed to keep their share to do what ever they want with.

      What normally happens is the IVA company splits the household disposable income pro rata based on how much each partner contributes to the income. As such if both parties contribute the same then the disposable income is split 50/50.

      Note: There was a period in the past when it was common for creditors to demand that the total household disposable was paid into an IVA. This was (they argued) only fair as it was likely that both parties had benefited from the credit expenditure. This practice has largely stopped now with new IVAs but it may be that it was the case when you started your Arrangement.

      Reply
    Georgie says:
    27/01/2021 at 16:01

    My husband is considering an IVA, however I am on maternity leave at the moment, with minimal income at present. I am concerned about what this will mean for my personal finances once I return to work

    Reply
      James Falla says:
      27/01/2021 at 16:11

      Hi Georgie.

      This is not a simple situation. When you return to work, the household income will increase. There will also be additional expenses to consider such as child care (which can be significant) and extra travel costs. However, if once everything is calculated, the household surplus has gone up, this would mean in an increase in his IVA payment. As such, this situation needs to be carefully considered and factored into any IVA your husband signs up to. His IVA company certainly must be made aware of it from day one.

      If you are confident that you know pretty much how all your income and expenses will change, I would say it is possible for him to start an IVA straight away. The change in circumstances can be built in the the agreement and any associated change in his payments anticipated so there are no surprises.

      However, if you are just not sure, I would suggest it might be better for him to put his IVA application on hold until you are back to work and you know what’s what. In the meantime he could use a debt management plan to manage his debts. This is a more informal and flexible solution. Once you are back at work and know what your income (and associated expenses) will be, you can re-assess the situation. He could then cancel his DMP and start an IVA at that time if it makes sense.

      Reply
    Kate W says:
    26/05/2021 at 17:59

    I am 6 years into an IVA. It is due to end in August 2021, the original agreement was for 6 years. I have received an email today stating that I would have to do an equity release. I do not owe the property I live in, it It is in my partners name. The Iva is in my name only and we have no financial connection. Will they ask me to ask my partner to release equity from his property even tho I am not on the mortgage and never have been. Many thanks

    Reply
      James Falla says:
      26/05/2021 at 18:05

      Hi Kate

      If you do not own the property you live in and you are not named on the mortgage, the property would not normally be included as part of your IVA agreement. You should certainly not have to try and release equity from a property owned by your partner unless this was a requirement specifically written into the original agreement.

      However, this would be highly unusual. It would have required your partner’s agreement from the outset. In the absence of such an agreement signed by him, remortgaging the property can’t be part of your IVA. Even if you tried, it would require your partner’s co-operation which he is under no obligation to give.

      You will need to sort this out with your IVA company. All I can think is that they have made some kind of mistake.

      Reply
    Clare says:
    09/05/2023 at 15:56

    Hi, me and my husband have seperate IVAs with separate companies. Not sure why but this was advised for us. One of the debts included on both is a joint loan. we have a shared ownership property which we are both named on. As far as I’m aware, you cannot do an equity release on a shared ownership house. Is this correct?

    Reply
      James Falla says:
      09/05/2023 at 16:32

      Hi Clare

      I believe you are correct. As far as I am aware, it is not possible to release equity on a shared ownership property. The only reason you would get a larger mortgage against the property would be to extend the amount of the property you both own.

      Given this I assume that both your IVAs will involve paying for an extra 12 months in lieu of any equity that you do have in the property. For more info about equity release in an IVA click on this link: IVA home equity release guide

      Reply

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