Joint Debts and Your IVA, Question by Question
What an IVA does and does not do for a debt you share with someone else.
Can joint debts be included in an IVA?
Yes, your part of a joint debt can be included in an IVA. The complication is that a joint debt is usually owed 'jointly and severally', which means each of you is liable for the whole amount, not just half. So your IVA can deal with your own liability, but it does not wipe out the debt itself while the other person is still on it.
What happens to the other person?
They remain fully responsible. Because you are both liable for the whole debt, the creditor can pursue the other person for the entire balance, even after your share is in an IVA. In practice this can mean they are chased for the full amount, which is why it is so important they understand the position before you go ahead.
Will it affect their credit file?
It can. A joint debt is linked on both your credit files, so any default or missed payment, and the fact the debt is now in an IVA, may show against the other person too. Their own credit could be affected even though they are not the one in the IVA. This is worth discussing openly with them beforehand.
Should the other person get their own advice?
Almost always, yes. The other person on a joint debt has their own decision to make, and their best option might be different from yours, perhaps their own arrangement, or simply continuing to pay. A free, impartial adviser can look at their situation separately. Getting their own advice protects them and avoids nasty surprises later.
Can we both deal with the debt together?
Sometimes. Where a couple or two partners share most of their debts, it can make sense for each to take out their own IVA at the same time, often called interlocking IVAs, so the shared debts are dealt with on both sides. Whether that works depends on both of your finances. An adviser can tell you if doing them together is the right approach.
What if only one of us is struggling?
Then a joint approach may not fit. If only one of you cannot afford the debts, that person can still use an IVA for their own liability, while the other keeps paying or makes their own arrangement. The important thing is that the person who is not in the IVA knows they can still be pursued, and plans for it.
Are joint debts treated like other debts in my IVA?
Within your IVA, yes. Your share of a joint debt is included alongside your other unsecured debts, frozen and partly written off based on what you can afford. The difference is entirely about the other person's continuing liability outside your IVA, not about how the debt is handled inside it.
Should I get advice?
Yes, and ideally both of you. Joint debts are one of the trickier parts of dealing with debt, because a decision by one person directly affects the other. A free, impartial adviser can talk through the options with each of you and make sure no one is caught out. It costs nothing, and getting it right protects your relationships as well as your finances.
