What happens if I move in with my partner in an IVA

12/09/2023
What happens if I move in with my partner in an IVA

You can move in with your partner during an IVA if you wish. However there are implications you need to consider. Particularly, how they will be affected and what will happen to your payments.

Included in this article:

Already in an IVA and need help?

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Are there any downsides for your partner if you move in with them?

Your IVA is a personal agreement that only affects you. No-one else is directly impacted. This is the case even if you are already married and living with them.

Because of this, if you move in with your partner (or they move in with you) during your IVA, they will not be directly impacted. Most importantly their credit rating is not affected. They will still be able to borrow money and get new finance agreements in their name if they wish.

In addition their assets remain their own and are not at risk. If you move into their home it will not be affected in any way. If they have savings they do not have to use these to pay your your IVA.

Your partner does not become liable for any of your debt if you move in with them during your IVA.

Will your IVA payments be affected after you move in?

Moving in with a partner (or they moving in with you) could mean your IVA payments go up. This is because some of the living expenses you were previously paying on your own, can now be shared.

Your partner may now pay half of the rent, council tax and utility bills. As a result, you would expect to be able to save money. Your surplus income therefore increases and your IVA payments could also go up.

The way to confirm this is to complete a new income and expenses budget which reflects the contribution your partner is making to the bills. Your IVA company will normally ask you to do this when you move.

If after you move in with your partner, you are supporting them financially, your surplus income may actually go down. In these circumstances it may be possible to agree a reduction in your payments. However this is not always possible.

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.

How to minimise disruption to your IVA

When moving in with a partner, the best way to minimise disruption to your IVA is to treat yourself or your partner as a lodger. This allows a simple change your income and expenses budget.

If you move into your partner’s property, you show you are now making a single payment covering your rent including bills. Where they move in with you, you simply show an increase in your income based on the rent they now pay you.

The advantage of this is it means you avoid having to complete a household income and expenses budget. You do not need to declare your partner’s income and specific expenditures to your IVA company. This keeps everything simple.

It also means that it is easy to change back if you decide to move out again before your IVA is over.

Want to move in with your partner during your IVA? We can help you decide the best way forward. Call 0800 011 4712 or complete the form below and we’ll call you.

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24 thoughts on “What happens if I move in with my partner in an IVA”

    Charlie says:
    20/01/2021 at 15:38

    Hello, I’m currently in an IVA but looking to move into my girlfriend’s house (who will charge me rent etc). I will still buy food but my commute will likely cost an extra £100 per month. Will I need to produce a new income/expenditure budget? I’m also currently 20% furloughed so my income is slightly less!

    Reply
      James Falla says:
      20/01/2021 at 15:46

      Hi Charlie

      If you move during your IVA you will need to tell your IVA company. They will almost certainly ask you to complete a new income and expenses budget to double check whether your surplus income has changed as a result. As highlighted in the above article, you should treat yourself as a lodger in your girlfriend’s property. That way you do not need to involve her income or expenses in any way.

      When you do you new expenses budget, make sure you include all the changes. You need to include your new rent figure but also any changes to transport costs.

      If your surplus income goes up overall as a result of the change, you have to expect that your IVA payments will also go up. If your surplus goes down, it might be possible to agree a reduced IVA payment. However this is not guaranteed (and may have other consequences such as an increase in the length of your agreement). You will need to discuss this with your IVA company if necessary.

      Reply
    Tomtom says:
    04/05/2021 at 05:46

    If i move in with my partner under my iva agreement, as you said i would declare that i am lodging with her, but would i need an tenancy agreement or lodging agreement to show my iva company, my partner doesnt know about my iva, and therefore couldnt ask her for an tensncy/lodger agreement thank you

    Reply
      James Falla says:
      10/05/2021 at 13:05

      Hi Tomtom

      It would be unusual for an IVA company to ask for any kind of proof that you are a lodger. Normally lodgers do not have any written agreement with their landlord. The only time the situation would be queried is if the amount you say are paying for your lodgings is unusually high. A reasonable budget would normally be the equivalent of the amount that you would need to pay to rent a comparable room in your area. Generally speaking £100-£125/week is a good rule of thumb.

      Reply
    Joanne says:
    05/01/2022 at 16:23

    If I need to move and sell my house during an iva will I have to pay back the original debts or the iva amount

    Reply
      James Falla says:
      05/01/2022 at 16:34

      Hi Joanne

      If you sell your house during an IVA (without a prior agreement with your IVA company which states otherwise), any equity released from the sale is a windfall. As such 100% of it (or your share if the property is jointly owned) will have to be paid to your IVA company. They will use the funds in the following way:

      – pay off 100% of the original debt owed (less any payments already paid)
      – pay off 100% of their costs and fees
      – In some cases, pay interest to your creditors at 8% pa from the start of your IVA (this depends on the terms of your IVA)

      You will receive any funds left over after the above have been settled. As you can see, selling a house during an IVA could be costly.

      One possible way around this is to make a prior agreement with your IVA company regarding the total amount you will have to hand over to settle your Arrangement in the event you sell.

      At the end of the day, they can’t force you to sell, so an early settlement agreement based on it being to both your advantages can sometimes be struck. However, this will very much depend on the attitude of your IVA company.

      Reply
    LauraJane says:
    23/02/2022 at 13:07

    Can I rent a house with my partner I’m on an Iva but they are fine, just thinking of the credit checks

    Reply
      James Falla says:
      23/02/2022 at 13:13

      Hi LauraJane

      The best option is for your partner to take the tenancy agreement in their own name alone. You could then be a named occupier, but as you are not the official tenant you would not have to pass the letting agent credit check.

      If your partner’s income is not good enough to take the agreement on their own, one way round this is for them to provide a guarantor for the rent. Obviously this can’t be you as it normally needs to be someone with a good credit rating.

      Reply
    Miker says:
    08/03/2022 at 11:55

    I have an iva as does my wife, we’re splitting up and I’m going to be living with someone else, I was going to take early pension to get settled in the move, will the iva take all the lump sum

    Reply
      James Falla says:
      08/03/2022 at 12:26

      Hi Miker

      Thank you for your query (below).

      If you draw money from your pension while you are in an IVA, the funds are classed as a windfall. This means all the cash would have to be paid into your IVA over and above your normal monthly payments. You can read more about this here: Your pension and an IVA

      Given this, the only time you should draw funds from your pension is if you have a prior written agreement with your IVA company that the cash will be used to settle your IVA early and in full.

      It might be possible to agree to draw more than is required to settle your IVA so you can then use the excess for whatever you wish. However you MUST get this in writing before making the withdrawal.

      Reply

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