IVA question

bobdauilda

If one partner in a marriage takes out an IVA does this affect the credit scoring of the non IVA partner?

Charco_2

Two separate credit ratings.

However, if you have joint debts then this may affect the other half.

If one partner enters an IVA and stops paying their half of the debt of £300 a month, the other partner either pays the full amount of £300 on their own or they can only afford £150 so then they are defaulting on the other half. The partner in the IVA will eventually pay off some of the debt over the five year IVA - say 30p in the £ - the partner not in the IVA will have to have paid the remaining 70pence in every £, not just their own half!
If the partner cannot afford the full £300 then obviously the amount of interest over the course of the debt will have risen.
It generally is not acceptable for the partner not in the IVA simply to pay the 70% and stop, they keep paying until the debt is dealt with and if the creditor gets overpaid when the IP disperses the dividend then they can try to reclaim any over payments... but then again, the IP may reclaim it for the benefit of the other creditors!!

Sorry, this reply just got longer and longer!

bobdauilda

If I took the IVA in my name would they only go on my income for consideration of payments or would my wifes be included too? If this is the case then maybe a divorce would be the best option for us to maintain her credit rating?

With combined debts of 95k (68k mine and 27k hers) would a single iva for the biggest debt be better than a joint iva for the total debt? And does the 5 year period before the credit rating is restored run from the start of the IVA or final settlement date of the IVA? ie if I took out an IVA today would my credit rating be ok in 2014 or 2019?

Charco_2

You look so fiscally attractive in this candle light! :rotfl:

Daresay you're not the only couple to consider divorce as a solution, sadly others have also chosen more drastic routes. However fear not, there is always a solution!

If I took the IVA in my name would they only go on my income for consideration of payments or would my wifes be included too? If this is the case then maybe a divorce would be the best option for us to maintain her credit rating?
Only you will be expected to pay into your IVA, your wife would have to retain her own surplus requirements to deal with her debts sure! Your IP will want proof of both incomes into the household and will draw up your expenditures accordingly (if you earn £1000 and your wife earns £500 then you will pay 66% of the household bills and she will pay 33% - in simple figures!) Only if it makes sense to have your wife contribute to your IVA would she have to (by her own choice)... a joint IVA may be the best option but this would be discussed too.

With combined debts of 95k (68k mine and 27k hers) would a single iva for the biggest debt be better than a joint iva for the total debt?
It would also depend on available surplus/disposable income. How much can you afford to pay? How much would your wife have left over to service her own debts?

And does the 5 year period before the credit rating is restored run from the start of the IVA or final settlement date of the IVA? ie if I took out an IVA today would my credit rating be ok in 2014 or 2019?
The IVA will be noted on your Credit File when the IVA commences and your credit record goes back over the last 6 years... So
- IVA starts 2009
- IVA finishes 2014
- IVA vanishes off your file in 2015
Any blemishes can then be tidied up at this time. The banks are awkward/churlish/childish over this but a few letters sorts it out!

Have you spoken to an IP (company) yet?
Remember to pay nobody anything until they provide a service for you! (No upfront/set up fees!)

bobdauilda

Looking to speak to Grant Thornton or Payplan re the IVA. The reason I asked about the joint or single is that a family member may be able to pay off the 27k for her but I will definitely have to have an IVA for the 68k. My income due to injury is only £650 ( and my debt liabilities alone are twice this) whereas the wifes salary and child care credit add another £2300 in her name. I thought that it may work out better for us if only I take the iva hit and she maintains her credit rating whilst we go through the iva hell or is that just being stupid and causing more casualties in the long run? She'd have about £50 left over after everything.ie would we be better to go joint and use £700 to service all the debts via an iva or just in my name using £650?
Am I right in my rough calculation of paying back 45p in the £ I would have to pay a total of £510 a month? Or is 45p in the £ way too low to consider?

bobdauilda

Charco are you still there?

MIVAA

Hi bobdauilda,

Whilst you're waiting for Charco to return, I just wanted to point you to the possibility of using the family member's £27k to propose a Full and Final IVA for all of your combined debts, where the £27k is offered and you walk away from the full £95K

This would need to be investigated in detail but would be a really attractive option to all concerned I think, especially as you mentioned your income is reduced due to injury.

I bet your creditors would be very interested in that offer.

Hope this helps

MIVAA

Charco_2

Sorry for my absence, I see MIVAA has given you a sound suggestion in the mean time anyway! Well worth sounding out with your IP... make it clear that it wouldn't be an option to pay the £27k into the IVA AND for you to make ongoing contributions.

There's £27k lump sum available IF it can be a full and final IVA, but other than that your wife will retain the lump sum for her own debts.

It is worth considering if you would prefer to free up your wifes' committments but this would also depend on what her credit scroe looks like now - has she already defaulted on debts?

RAS

Why not just wait a while and do full and final settlements on the debts? No IVA fees that way.

Charco_2

How would you get to settle the dent full and final?

An IVA will settle the debt s for what an individula can afford to pay over a five year period... the remainder of the debt is written off by agreement with the creditors - i think we can agree an IP will have earned their fees in this instance.
What you seem to be seriously suggesting is that the OP just waits it out, hangs onto any lump sum he may have and when the creditors get tired chasing him he can agree to pay back a lump to each creditor at various times in the hopes that they'll be happy to write off the remainder. How long does this plan take? Will it be finished in a years time? Six years time? More?

I suppose the choice is yours Bobdauilda, you can tackle your debt head-on now and have the comfort of knowing you are dealing with your debts so there are no nasty surprises or you can ride the rollercoaster of chance and who knows where it may take you - sounds exciting, no?