If you are living with a partner or spouse they are not responsible for paying your debts. However there are implications if you start an IVA.
Included in this article:
- Does your partner have to pay your debts?
- How is a joint property affected?
- What happens if you have joint debts?
- Can you continue to pay your partner’s debts?
Want help to start an IVA? Give us a call (0800 077 6180) or complete the form below to speak to one of our experts
Does your Partner have to Pay Your Debts if you start and IVA?
In the UK your partner is not liable to pay debt in your name. If you do not pay it then no one else can be legally forced to do so regardless of whether you are married or living together.
As such if you start an IVA they are not legally responsible for helping to make the payments. In addition they are not liable to pay any debt left outstanding after the Arrangement is completed.
You will normally have to disclose their income in your application. This is to confirm the amount they should contribute towards the household living expenses and ensure you are not paying more than your fair share.
Your partner should not have to contribute towards your IVA. Their share of the household disposable income is not included in your monthly payment unless they agree to assist you.
Struggling to get your head round all of this? We can help. Call us (0800 077 6180) or complete the form below. The advice is free and confidential.
How is a Joint Property Affected if you start an IVA?
If you are a home owner you will not be forced to sell your home if you start an IVA. However you will need to agree to try and release equity from it to increase the amount paid back to your creditors.
Where the property is owned in joint names with either your partner or spouse their share of the equity is protected. You would only be expected to realise extra cash from your share of the equity.
It will be important for you to tell the other joint owner about your IVA and potential obligation to relase some of your equity. If you do not and they subsequently refuse to co-operate it could lead to the failure of the Arrangement.
You may be able to settle your IVA early if the joint owner agrees to releasing some of their share of the home equity to enable a lump sum payment to be offered.
What happens to Joint Debts if you start an IVA?
You have to include all your unsecured debts in your IVA. This includes any in joint names with your partner. However they are not protected by the Arrangement. They remain liable for 100% of the balance.
This may not be an issue of they can maintain the ongoing repayments for these debts themselves from their share of the household surplus income. However if they cannot the creditor can start legal action against them.
To protect themselves from this action your partner will also have to consider using a debt management solution. The most appropriate option for them will depend on the wider financial circumstances.
If you and your partner have joint debts you could consider a joint IVA. This would give you both legal protection from your creditors.
Can you continue to pay your Partner’s Debts if you start an IVA?
You may have been helping your partner pay their debts from your income. If so it is unlikely you will be able to continue doing this if you start an IVA. All of your disposable income will have to be paid into the Arrangement.
It is not possible to include an amount for paying their debts in your living expenses budget. Your creditors would reject your proposal on the basis that you were making preferential payments (paying some and not others).
Where your partner cannot afford to pay their debt perhaps because they have no income of their own they will also have to consider using a debt management solution.
It might possible for you to make savings from your agreed living expenses to enable you to maintain your partner’s debt payments. However in most cases this is not recommended or feasible.
Want to start an IVA? We can help. Give us a call (0800 077 6180) or complete the form below. The advice is free and confidential.
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When I started my IVA, i wasnt married yet. I married last yr. Do i need to include my husband’s wage slip when they ask for it or i can refuse to give it? He has nothjng to do with the debt and it is all mine. What should i do? There are expenses at home that i dnt ask him to pay like for the car because he doesnt drive.
Hi Nesser
If your husband is not part of your IVA then legally speaking neither you or he can be forced to hand over any of his wages slips to your IVA company. They have no legal right to ask for information from a third party.
Having said that when you started your IVA were you living together with your now husband or has he moved into your property subsequently? If he has moved in then a potential issue is that this could impact your living expenses.
If he was living with you when you started your IVA or if he did move in subsequently but you are saying that your living expenses have not changed then there should be no reason to change your monthly IVA payments. In this situation there would be no need to give your IVA company any info about his income at all.
However if you are saying that your living expenses have now increased and you need to reduce your IVA payments this is a different matter. To have any chance of agreeing that you will have to give info about his income. In such circumstances the IVA company have a right to ask for it. You can refuse but then they can equally refuse to change your payments.
Hi,
Is it possible to apply for an IVA online as my friend does not speak English so it is difficult for them to apply via Phone. If so which Online company would you recommend?
Thanks
Hi Amber
It is not possible to apply for an IVA on line. An IVA is a formal legally binding debt solution. As such the application process requires a certain amount of discussion on the phone to ensure it is the right solution for the applicant and that they fully understand the implications.
That said in the past I have helped people to apply who do not have strong English if they have a friend or family member who can assist by translating for them. If you would like to consider this then please give me a call (0800 077 6180).
Hi, my partner is in the process of applying for an IVA for business and personal debts. He is a sole trader. I don’t want to be negatively affected by this in anyway. I have an FCA regulated job and I am SMCR checked annually. My credit rating is perfect and I am managing all of my own personal debts.
I have read in your forum that my income will be assessed. I do not want my name to be included on anything to do with the IVA as I don’t want this to impact on my job. It is also worth noting that the mortgage is in my sole name as I purchased and lived in this house for 5 years before we met. Can you please advise me if this is going to be affected?
Hi Laura
I can confirm you have no need to worry. If your partner starts an IVA this will not reflect on you in any way. It will not affect your credit file and you will not have to sign anything or be involved. Nothing will show up if anyone does a credit check on you or in your SMCR check.
If you are living with your partner then the standard way to calculate his surplus income is to work out the surplus of the household and then split it pro rata. You keep your share and he pays his share into his IVA. To do this you simply need to provide your income figure. Your employer is certainly not employed or told. The only way around this is for your partner to present his financial situation as if he is lodging with you. This could be done given he is living in your house. However it would only really be practical if you have no children.
You do not have to worry about your property. Given it is in your name and I assume you have always paid the mortgage, it will not be affected and should not be involved in his IVA in any way.