IVA - what happens to Joint loans???

newlywed

Hi,
If someone goes into an IVA and believes half their debt is written off, what happens about any joint loan they had?

The other party is not in an IVA.

Does the debt reduce because of the one persons IVA or do they just pay the bit they agree and then the other person is chased for the rest? Or is the other person chased for the whole amount?

Richard_S

newlywed wrote: »

Hi,
If someone goes into an IVA and believes half their debt is written off, what happens about any joint loan they had?

The other party is not in an IVA.

Does the debt reduce because of the one persons IVA or do they just pay the bit they agree and then the other person is chased for the rest? Or is the other person chased for the whole amount?

Hi newlywed,

Joint debts are secured on the basis of "joint and several liability" if one party defaults on the debt the other is liable for the full amount. How that is affected by an IVA I wouldn't like to say, but unless the terms of the loan were altered (which is highly unlikely) then the non-defaulting party will be liable.

Richard

newlywed

Thanks.

When someone enters into an IVA are they likely to have been advised of this?

Richard_S

newlywed wrote: »

Thanks.

When someone enters into an IVA are they likely to have been advised of this?

IVAs are managed by companies or partnerships that need to make a profit to survive (or prosper as some would say). I would imagine that they may well be "economical" with the facts if they thought that imparting that sort of information would jeopardise the prospects of the IVA going ahead.

There are some very good reasons for agreeing to an IVA but in my opinion most of the advantages rest with the companies that manage them.

Richard

newlywed

Thanks. OH's ex was telling him not to worry about the loan and not to make any payments as she was sorting it. Apparently her version of sorting it is going on an IVA so now OH is liable for the whole sum!!!! :mad:

With an IVA, do you know if the payments made over the 5 years would actually reduce the sum? Or would the company write off part of the loan because she is on an IVA? Or is OH liable for the whole lot?

Sorry, not sure how IVA's work - is it like a DMP but through the court and insolvency practitioner?

Bollinge

Looks like the OH will be jointly and singularly liable!

If the IVA is paying out 30%, then I suspect the lender will be after him for his half, plus the 70% outstanding on her half.

Yes, IVAs are administered via Insolvency Practitioners, (who, according to one of their leaflets, charge "fees in line with the rates of other professionals", i.e. £200-£300 an hour plus VAT)

Richard_S

newlywed wrote: »

Thanks. OH's ex was telling him not to worry about the loan and not to make any payments as she was sorting it. Apparently her version of sorting it is going on an IVA so now OH is liable for the whole sum!!!! :mad:

With an IVA, do you know if the payments made over the 5 years would actually reduce the sum? Or would the company write off part of the loan because she is on an IVA? Or is OH liable for the whole lot?

Sorry, not sure how IVA's work - is it like a DMP but through the court and insolvency practitioner?

Hi newlywed,

I don't think your O.H will be liable for all of it because some of it will be paid by his ex's IVA. How they calculate how much, and when it has to be paid, I wouldn't like to say and if his ex's IVA fails then that will complicate things even further.

I wish I could say something positive about the situation but it's one of those messy things that there's no quick and easy way out of.

Richard

newlywed

Bollinge wrote: »

If the IVA is paying out 30%, then I suspect the lender will be after him for his half, plus the 70% outstanding on her half.

So an IVA is likely to negotiate to pay 30% of the total sum of a joint loan or 30% of half of the joint loan?

Just trying to get an idea of what the liability will be (OH is paying but we are trying to work out how long it is likely to take now).

Even if her IVA pays 30% of half of it - it's gonna be better than we thought.

newlywed

Richard_S wrote: »

I wish I could say something positive about the situation but it's one of those messy things that there's no quick and easy way out of.

Yeah OH never realised the full implications of a joint loan. His ex convinced him it was a good idea and then shortly afterwards did a bunk with an 18 year old.

Unfortunately, this loan thing was always going to be "messy", just didn't realise the extent.

So what does happen if the IVA fails and she gets made bankrupt?

And is there any way we can find out what terms have been negotiated with this debt on the IVA? The ex wouldn't even admit she was on an IVA the debt collection agency let slip!!!

Bollinge

If she goes bankrupt and they only pay out 15p in the pound to her creditors I guess her ex is in for the other 85p of her half.

There is a slim chance the lender might be prepared to make a gesture of goodwill, but I suspect not. You can always ask them. You should be in contact with them anyway.

Sorry.

newlywed

Bollinge wrote: »

There is a slim chance the lender might be prepared to make a gesture of goodwill, but I suspect not. You can always ask them. You should be in contact with them anyway.

It was with a debt collection agency who then wrote to OH to say they are no longer dealing. He has rung 5 different people to try and find out what's going on - the original lender didn't know anything.

They keep trying to pass him off to a company that are only dealing with the IVA bit of it!!!