Can your Partner pay your IVA?

Can your Partner pay your IVA?

Your partner is not usually liable to pay your debts. However they can choose to pay your IVA on your behalf if you cannot afford to do so yourself.

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Does your Partner have to pay your IVA?

Legally speaking your partner is not responsible for paying debts in your name. This is regardless of whether you live together or are married or not.

Having said that if you are living with a partner they will be involved with your IVA. This is because when calculating what you must pay into the Arrangement their income will normally have to be included.

Creditors will usually only accept the Arrangement if the payments are based on the household disposable income. Their arguement is that you have both benefited from the debt and so should both help to repay it.

Your partner may have their own debts to pay. They will only be able to continue doing this if they can afford to after contributing to their fare share of the household expenses.

Can your Partner pay your IVA if you have no income?

You may be in a position where you have little or no income of your own. In these circumstances you can still do an IVA. Your partner or any other third party can pay it for you.

This situation often occurs where a couple both have debts and decide to start a Joint IVA. The household disposable income is used to pay both Arrangements even though only one party may be working.

However it is also possible for someone else to support your payments. For example a parent can step in and maintain them you if you cannot afford to do so from your own income.

Instead of supporting monthly payments your partner could offer a one off cash sum. This would enable you to do a Lump Sum IVA with no additional ongoing payments.

Can your Partner pay off your IVA early?

An IVA can be settled early. Generally speaking this requires someone to offer to pay the remainder of your outstanding payments with a single cash sum.

The amount required normally has to come from your Partner or another third party. You cannot use a windfall you have received yourself. This would have to be paid into the Arrangement over and above your agreed payments.

The amount required to settle will depend on your circumstances. If they have not changed and you could carry on with the agreement it will normally have to be equivalent to the total of the amount outstanding.

If you are no longer able to pay your IVA due to a change in circumstances it may be possible to settle for an amount which is far less than the sum of the remaining payments.

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13 thoughts on “Can your Partner pay your IVA?

    Daniel says:

    Does it matter where the money comes from for a friend to settle my IVA?

      Hi Daniel

      At the end of the day it does not matter where your friend gets the funds from. It could be from their own savings or maybe they plan to sell an asset or borrow the money. The one exception of course is the cash can’t come from illegal means.

      It is important to let your friend know that your IVA company will have to do basic money laundering checks. They will need a copy of your friend’s ID to confirm who they are (ie a copy of their passport or photo driving license). Also then will need confirmation that the funds are coming from a legitimate bank account so they are likely to ask for proof of the account such as a bank statement summary.

    Dale says:

    Hi could my partner who has a good credit score take out a loan and gift that money to me to clear my IVA?

      Hi Dale

      Yes, your partner could take a loan and that money could be used to pay off your IVA.

      Before doing anything, you should agree an early settlement amount with your IVA company. Normally, this would be the equivalent of the sum of your remaining payments. However some IVA companies work to different rules. So make sure you get the figure required in writing from them before your partner takes a loan.

      I would advise you to be cautious about going ahead with this plan. If you include the interest your partner will have to pay on the loan they take, it is likely to work out more expensive to repay the money they borrow compared to if you simply continue paying your IVA to the end in the normal way.

      I would therefore only advise going ahead if there is a specific reason why you want to settle early. For example you know you will be getting a significant pay rise before it finished and you want to avoid paying more into the Arrangement.

      If you do go ahead, it is normally best to keep the loan money is stay in your partner’s account. It can then be paid direct to your IVA company from there.

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