How is my partner’s property affected by my IVA

How is my partner’s property affected by my IVA

Your partner’s property is not at risk if you start an IVA. Their home should not be effected in any way as long as the mortgage payments and utility bills are maintained.

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Is your partner’s property at risk if you start an IVA?

Starting an IVA does not affect your partner’s property. This is because as far as your IVA is concerned, you have no legal right to, or financial interest in, the property.

As long as your name is not on the mortgage or listed against the property at the land registry, your creditors can’t make any claims against it. Your IVA can’t include the property even though you live there. As a result the IVA can’t affect it.

This position is the same, whether or not you have assisted with the mortgage payments. Even if your partner is supporting you financially. You still have no claim on the property and so neither does your IVA.

Not keeping the mortgage payments up to date is the only way your partner’s property would be at risk. They must always make sure that they have sufficient funds to pay the mortgage on time. If they don’t and start to miss payments, the mortgage company could repossess.

Your credit rating will become poor after you start an IVA. However, it will not impact partner’s credit rating. For example, they can still renew their mortgage in the future.

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 this page. The advice is free and confidential.

Does equity have to be released from your partner’s property?

It is not possible to force your partner to release equity from their property to support your IVA. This is because they are not part of the Arrangement.

The terms of your IVA don’t affect your partner because they have not signed up to the agreement. As a result, they can’t be forced to repay your debts with their assets.

Having said that, your partner can release equity from their property to pay off your IVA early if they choose. There might be a number of reasons why they decide to do this. For example, you might be due a pay rise and would prefer not to keep paying the resulting increased IVA payments.

Nevertheless, the key point here is that your IVA company can’t demand equity from your partner’s property.

What if the property is in joint names?

If you and your partner’s property is owned in joint names, you have a financial interest in it. It will then be affected by your IVA.

Given there is equity in the property, you are likely to have to sign up to a so called equity release clause. In other words, you will have to agree to try and release equity from your share of any equity in the property during the Arrangement.

Any funds released in this way are then used to increase the amount repaid to your creditors.

It is actually unlikely that you will ever have to release any equity from a jointly owned property. This is because your partner would have to give their agreement to any change to the mortgage. If they refuse, it can’t be done.

For this reason, where jointly owned properties are concerned, ignoring the equity release clause will be the more likely outcome. Instead, your IVA payments will be extended a further 12 months.

Funds can only ever be raised from your share of any equity in a property. So if its in joint names, your partner’s share is protected because they are not involved in your IVA.

What if your partner’s property is rented?

Your IVA will have no affect on your partner’s rented property.

It makes no difference whether the tenancy agreement is in your partner’s name or in joint names with you. Your landlord is not told about your IVA. This means they will not find out unless you tell them.

As long as you and your partner maintain your rent payments, you should have no issues.

The only problem you might face is if you want to move to a different rented property during your IVA. The fact you are in the Arrangement is recorded on your credit file. Your credit rating will become poor and as a result you would fail a landlord’s credit check.

If you and your partner want to move, the best way round this problem is for them to take the tenancy in their name alone if possible.

Living in your partner’s property and want to start an IVA? Call us (0800 011 4712) or complete the form at the bottom of this page. The advice is free and confidential.