As humans we naturally care about how our actions affect the people that we love the most, therefore it comes as no surprise that when choosing a debt solution people often question how their partner will be affected.
For you to decide with peace of mind, here is a brief explanation of how IVAs may or may not affect your partner's life.
An Individual Voluntary Arrangement (“IVA”) is a formal debt solution available to people living in England, Wales, and Northern Ireland. It could be a great option for people who are struggling to keep up with multiple debt repayments to multiple lenders. IVAs support people in repaying their unsecured debts (i.e. credit cards, overdrafts, store cards, payday loans).
An IVA comes with several benefits:
If you were to take out a Joint, interlocking IVA for both of you, your partner would be expected to also contribute to the payments in the IVA.
However, if you were to take out an IVA for just yourself, your partner would not be expected to make payments directly towards your debts, however, they would be expected to contribute their share to the normal monthly household expenses. Therefore, should you choose an IVA you can rest assured that your partner would not be obliged to financially contribute to your monthly IVA payments directly.
One of the great things about an IVA is that your monthly payments are always calculated after your essential bills are considered. If you live with a partner, a household income and expenditure will be conducted. The total monthly expenses for you and your partner will be deducted from your total income. This means that before you start repaying your debts you will be able to pay for things such as your car, home, electricity, water, and food.
As a result, your partner will not feel the burden of having to pay all the household bills alone.
If your partner earns significantly more than you, they may be expected to contribute slightly more to household bills, as this will be based on their income. However, this is something that will be discussed when the IVA is being finalised, and here at Debt Support Centre, we would always do what is best for you and your circumstances.
Your IVA can affect your partner's credit file if you have any joint finances such as a mortgage or a joint loan or overdraft, as your partner will be linked to you.
It may be possible to break the financial link between you and your partner by applying for a Notice of Disassociation, but this would only work if you were to close any joint bank accounts you have or a joint loan that is not a mortgage.
It is up to you to decide if you would like to tell your partner about your IVA. It is not something you will be forced to do.
You may find telling your partner about your IVA more beneficial not only to you but to your relationship. Your partner may be able to offer you extra support and guidance on your journey to better finances, by helping you to stick to your budget. Additionally, keeping the IVA a secret could mean you cannot speak freely to your IVA provider when you need to.
Moreover, when your IVA is set up your IVA provider is likely to ask for an income and expenditure that covers not only your finances but also your partner’s. This is to ensure they obtain a true reflection of the household to ensure the IVA payments will be affordable for your situation. It may be easier to complete this with the help of your partner.
Please note: If you have joint debts with your partner they may also be contacted by the joint creditor as the lender may get in touch with your partner regarding the payments, so your partner may know something has changed.
Once approved, your details will also be recorded on the Insolvency Register, which is a public record. Although not widely known about it is a register that your partner could access should they choose to.