IVAs With Joint Debts

For advice specific to your joint debts and exact circumstances, contact us, we’ll clarify the situation for you.

Joint Debts Explained

Joint debts are when two or more parties (people) have signed a credit or loan agreement together, or some other form of agreement for goods or services to be provided for the benefit of all parties. In most cases, all parties are individually responsible for the full amount of the debt.

This is called joint and several liability. It is not true that, in such circumstances, each is liable for half the debt. If one person can’t (or won’t) pay, creditors can and will pursue the other for the full outstanding amount.

It does not matter the purpose of the loan, who spent the money, or who benefited from it. It does not matter who is, or has been making repayments to date. If the debt is a joint one, it does not matter if the cause of the debt is the other person’s financial irresponsibility. In the eyes of the law you are both responsible for the settlement of the entire debt.

My Partner’s Debts

You are not liable for anyone else’s debts unless you co-sign a credit agreement or are acting as guarantor.

This is true even when you are married, have a civil partnership, or live with them with shared financial responsibilities such as children or joint mortgage. Conversely, someone else’s debts can’t be included in your IVA.

Joint Debts on Credit Cards

Often there is confusion about who is liable for credit card debts. Credit cards are never issued in joint names.

The credit agreement is with a primary cardholder, who may have requested an additional card for their spouse/partner. Any additional cardholder is simply given the facility to use the the primary card holder’s credit. All debts are in the primary cardholder’s name. It does not matter which card is used.

Joint Liability & IVAs

In the case of joint debts, where one party enters an IVA, creditors can pursue the other party for the full outstanding balance of any joint debts.

This means if your IVA works out that you are repaying say 30% of your total debts; this will mean you’re paying 30% of each debt. A creditor can pursue the other party for the other 70% outstanding on the debt owed to them.

Linked IVAs

When two parties apply for a IVA and qualify due to some individual and some joint debts, linked IVA proposals can be made.

Linked IVAs are separate but  interlocking arrangements. Each is conditional upon the other and they are administered jointly for convenience. Both must be approved to proceed.

Joint IVAs

There is no such thing as a joint IVA, even when a married couple enter into an IVA together and all their debts are by credit agreements they have jointly signed; their IVAs are linked and interlocking.

IVAs and joint debts, especially where the parties also have non-joint debts, can be complicated. For clear advice, specific to your own circumstances, please contact us.