Just found out my husband has done an IVA

swtchick87

Hi all.

My head is still spinning from when I opened the letter and found out my husband took out an IVA. I had no idea why he did this till an hour ago. We are in debt by nearly £19,000. I knew we had £4,000 on credit cards but thats all. I feel like my world has come crashing down around me. He is the only earner, with a salary of £23,000 per year. He never tells me what he spends his money on. He pays the rent, bills and what we need. I always thought we lived within our means. I'm so shocked and hurt.

I don't know properly what an IVA is. Can someone explain to me and also tell me what effects this has on credit rating?

Tixy

Hi

I can understand you being totally shocked that he has made such a life-changing decision on his own. Have you talked about it now, has he explained how the debts came about? has it been through many years of overspending or any specific items that caused them to get to an unmanagable level. Have you talked about what budget you will both now have to stick to so that he can make his IVA repayments each month?
I hope he will start being more open about the family finances and you can then both work at living within the budget and making savings etc. Are you in a position to be able to look for work so you can contribute financially?

An IVA is a formal agreement with his creditors whereby he will pay a set agreed amount each month towards his debts. This will last 5 (or sometimes 6) years and after that point any remaining debt will be written off by his creditors. If he owns a property he may be required to try to remortgage to release any equity in the house after 5years.

This link explains about IVAs http://www.adviceguide.org.uk/index/your_money/money_management_index_ew/help_with_debt_index_ew/individual_voluntary_arrangements_ivas.htm

The IVA is a form of insolvency (like bankruptcy) and his name will appear on the insolvency register which anyone could search. It will have a serious impact on his credit file and ability to get any future credit, even after the IVA has finished. There is a section on it in the CAB guide above.
Do you own a property? if so is it owned jointly or just in his name? do you have any joint financial products (mortgage or loans or bank account?) If you do then you will be financially associated and it will also have an impact on your credit rating as well.