How is my Partner affected by my IVA?

12/09/2023
How is my Partner affected by my IVA?

Your partner is not included in your IVA. However they could still be affected by the Arrangement in a number of ways.

Included in this article:

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Is your Partner’s Income included in your IVA?

If you are living with a partner or spouse their income has to be declared in your IVA application. This is because the amount you pay into the Arrangement is calculated using the household disposable income.

Legally speaking your partner is not responsible for paying debts in just your name. However their income has to be included in the income and expenditure statement to show that they are contributing their fair share towards the household bills.

The fact they contribute to the bills is then reflected by splitting the household disposable income between you. This is done using the same percentage split as your income contributions. Your share will have to be paid into the IVA. Your partner can keep theirs to pay for their own commitments.

Some creditors require that 100% of household disposable income is paid into an IVA. They argue this reflects the fact that both you and your partner have benefited from the money you borrowed.

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

What happens if your Partner has their own Debts?

Your partner may have debt in their own name. Where this is the case they should be allowed to continue paying it from their share of the household disposable income.

There will only be an issue with this if their monthly debt payments are greater than their share. If so it might be possible for them to continue with their payments if savings can be made from your agreed household expenditure budget.

If not and your partner cannot afford to continue paying their debt you may need to consider a Joint IVA.

If your partner has debts but no income of their own or your creditors demand that 100% of the household disposable income is paid into your Arrangement you will have to consider a Joint IVA.

What if you and your Partner have Joint Debts?

Joint debts are things like joint overdrafts or bank loans. Both parties are joint and severally liable for the repayment. If one party does not pay the other is still responsible for 100% of the outstanding balance.

You must include any joint debts in your IVA. However because the Arrangement only protects you this will result in a problem for your Partner. The creditor can and will continue to chase them for the money.

If they have their own source of income it may be possible for them to continue making the payments from their share of the disposable income. If not then you will need to consider a Joint IVA.

Where you and your partner have joint debts it is common to start a joint IVA. However this is not compulsory.

How is a Jointly owned Property affected by an IVA?

If you are a home owner you will need to agree to try and release equity from your property as part of your IVA. However if it is jointly owned you only have to consider your share of any equity. Your Partner’s share is protected.

You must ensure that your partner understands you may have to release equity as part of the Arrangement. If they refuse to allow you to do so it could result in the failure of your Plan.

Even though your Partner is not obliged to touch their equity one option you might consider is releasing some of their share to settle your Arrangement early. The offer can be made because it is based on money your creditors would not otherwise be entitled to.

Want more advice about how your partner will be affected if you start an IVA. Give us a call (0800 011 4712) or complete the form at the bottom of the page. Its free and confidential.

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37 thoughts on “How is my Partner affected by my IVA?”

    Paula says:
    26/02/2018 at 10:45

    If I decide to move in with my new partner whilst I am already in an IVA will they be affected? It’s been in place over a year and the debt is all mine?

    Reply
      James Falla says:
      26/02/2018 at 11:00

      Hi Paula

      The first thing to say is that if you move in with your new partner your IVA will not affect them at all. Neither their credit rating or property will be affected and they will not have to make payments towards your debts.

      Having said that you will need to speak to your IVA company and tell them about your change of circumstances. Your IVA company will probably ask you to complete a new income and expenses budget to see if anything has changes as a result of the move.

      If your living expenses fall as a result your disposable income will go up. As such the amount you pay into your IVA each month might also have increase.

      Reply
    James says:
    03/02/2019 at 13:08

    My IVA was completed a number of years ago I have received PPI compensation that my IVA company want as an acquired asset. The payment was for a joint loan that was completed prior to the IVA and neither the loan or company were on my IVA. Can the IVA company class my wives compensation as an asset to the IVA, Her income was never part of the IVA and neither was she

    Reply
      James Falla says:
      05/02/2019 at 18:03

      Hi James

      Given your wife was not in the IVA her half of any PPI compensation paid in regard to a joint loan is hers to keep. Your old IVA company have no claim on her share and it can be kept by her to spend as she wishes. If the bank has paid the compensation direct to your old IVA company then they will have to return half to your wife.

      Reply
    james says:
    06/02/2019 at 20:09

    Thank you for the reply

    Reply
    Michelle says:
    01/10/2019 at 14:14

    Hi, my partner is in the process of goin into an iva. But we are thinking of moving in in November. I am on benefits only so when he moves in it will have to be changed to universal credit. 2 of our sons are in receipt of dla and me carers allowance. Which incomes will the iva take into consideration when he moves in?

    Reply
      James Falla says:
      01/10/2019 at 14:43

      Hi Michelle

      If your partner is already in an IVA and then moves in with you this will not affect you directly. Your credit rating will remain unchanged and non of your income can be taken to pay his debts.

      To keep things simple I suggest you treat him as a lodger. In that way he can keep his income and expenses totally separate from yours an you will not have to give any information about your income to his IVA company at all.

      He will have to tell his IVA company that he is moved and they will need him to do an new income and expenses budget. But this will only need to include his income and expenses. He will need to include an amount for rent that he pays you (as his landlady) for board. This should be based on the amount he would have to pay to rent a similar room in your area.

      As a rule of thumb £70 – £100/week is normally about average for someone who is lodging. This would include bills so he would not include anything more for these. Other than that his expenses should follow the guidelines for a single person.

      In this way the IVA company can work out if there is any change to his IVA payment but you do not need to be involved at all.

      Reply
    Clare says:
    02/10/2019 at 12:12

    Hi, I have been in an Iva for 6 months but me and my husband are separating after the stress of all the debt. Therefore I will be looking to reduce my Iva monthly payments because I will be moving out. Where do I stand in this situation? And will my husband have to pay my Iva.

    Reply
      James Falla says:
      02/10/2019 at 14:49

      Hi Clare

      If you separate from your husband and need to go and get your own place your living expenses are likely to increase. As such your disposable income will fall. This will mean you will struggle to maintain your agreed IVA payments.

      The first thing you will need to do is inform your IVA company of the change. You will need to give them a new income and expenses budget showing what you can pay going forward. Given this amount is still reasonable they may be able to agree with your creditors that your payments can reduce. However you would also have to accept an extension to your IVA (normally 12 months).

      If the disposable income you are left will is not sufficient to sustain your IVA your IVA company will not be able to continue the agreement and it will be at risk of failure. At that point the only way to keep it going is if you can get help from a third party. Perhaps someone would be able to top up the monthly payments for you or lend you a lump sum to enable you to settle the arrangement. Either way your husband is not legally obliged to pay your IVA (assuming it is in your name only).

      Reply

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