Joint IVAs enable two people, who have shared debts and shared living costs, to propose two IVAs based on a common financial statement.
Joint IVAs are also sometimes referred to as interlocking IVAs.
When a joint IVA is proposed there is a significant saving in the costs of the joint IVA as compared to two single IVA applications, and it is for this reason that they are so popular.
Also, due to the reduction in costs, joint IVAs hold another advantage, for in certain circumstances, they enable IVAs to be proposed that otherwise wouldn’t be financially viable if they had to stand on their own merits.
Joint IVAs are most common in cases where couples with shared debts and/or a common household budget find they can no longer afford the costs of their joint debts, but joint IVAs are not exclusive to a man and his wife.
Joint IVAs can exist between any two people with a shared budget.
In joint IVAs the insolvency practitioner will be able to reduce the costs of an IVA because the data required will be common to both IVAs. In actual fact joint IVAs are still two separate IVAs on the IVA register but treated in a joint manner from the administrative point of view.
It is also worth pointing out that Joint IVAs are completely dependant on each other, and if one of the joint IVAs fail, then there is a real likelihood that the remaining IVA will fail also.
It is for this reason that most joint IVAs are between couples as, generally speaking, a couple will have a greater incentive to successfully complete the IVA together, whereas two people who are just sharing a rented property together may not feel comfortable committing themselves to a 5 year joint IVA.
For further information on how joint IVAs work read this article, which gives a more thorough insight into a joint IVA.
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