How do Joint IVAs work?
Generally speaking, an IVA usually helps individuals to become debt free whilst avoiding bankruptcy, but in certain circumstances an IVA can take on a more complex profile and assist two people to become debt free as a team.
These are called Joint IVAs and they enable two people to join forces and submit their IVA applications simultaneously.
Although they're called joint IVAs, in truth they're actually two separate IVAs, proposed, supervised and administered in tandem. This approach makes Joint IVAs very efficient, which reduces the Insolvency Practitioner's costs to creditors.
Joint IVAs are based on a common financial statement which means they're intrinsically linked and they're mutually reliant on each other for their success.
By allowing the applicants to joining forces in this way, the Joint IVA solution works well where two 'stand alone' IVAs may not have been plausible. It also offers the chance for two individuals to qualify jointly for an IVA where one or both may not have been able on their own.
Applying for a Joint IVA
Before the IVA proposals can be prepared the applicants must first qualify an IVA by meeting these minimum requirements:
- The applicants must have joint debts of at least £10,000.
- Their debts must be owed to at least 2 different creditors.
- The household income must not be solely based on benefits.
- Between them must be able to afford the minimum IVA payment for their debt level.
Joint IVA example
Here is an example of an imaginary case where a Joint IVA might be a suitable solution:
A couple, living together, each have a personal unsecured debt of £9,000 which is owed to 2 creditors.
Their monthly repayments to their debt adds up to £350 each person, or £700 between them.
One works part-time, the other full-time and the joint incomes generate enough money to cover their joint living expenses.
Unfortunately, once their personal living costs are deducted from their joint income they are left with just £220, not enough to maintain their expected debt repayments of £700.
As you can see, neither have sufficient debt to qualify them for an IVA on their own, but together their debts amount to £18,000 which is high enough to qualify. Neither could afford the minimum IVA repayment on their own, but by using team work and pooling resources they can.
By combining their incomes and lumping their individual debts together, a joint IVA becomes a real possibility.
Teamwork to beat debt
A joint IVA does not require the two people involved to be married or even in a relationship. It can be any two people who share the same living costs.
Getting into debt as a couple is easy, so it's nice to know there is a debt solution that offers you a way out together.
Professional Advice On Joint IVAs
For further information on Joint IVAs and how they work call the specialist team at My IVA Adviser on 0800 088 7503, alternatively, complete this form and one of the team will call you back at your preferred time.