When two people shared debt problem, it's sometimes possible for them to join forces and try to deal with the problem as a couple, rather than two individuals.
And, when the circumstances are right, they may qualify for a Joint IVA, also known as an Interlocking IVA.
Joining forces and using the household’s resources to deal with a joint debt problem, rather than trying to manage individually, can sometimes prove to be the most effective method in dealing with debt.
It can also open up the option of proposing a Joint IVA where separate IVAs wouldn’t otherwise be viable.
For example, where separate debt levels might be too low to warrant either person applying for an IVA, their combined debts might warrant a Joint IVA application.
Similarly, Joint IVAs are particularly effective in households where one household member generates the majority of the household income, because the Joint IVA ensures each creditor gets their fair share from the IVA contribution, something creditors from both parties appreciate.
In reality the Joint IVA still consists of two individual IVAs, put in motion at exactly the same time for the same duration, with each separate IVA engaging its own set of creditors, independently from the other.
But in practice the Joint IVA behaves as if it was just a single IVA, with just one monthly payment being made to cover the contribution to both.
Because of this, each of the IVAs becomes mutually reliant on the other, as they are based on a common financial position.
It is therefore critical to a Joint IVAs chances of success, that the applicants appreciate how dependent they are on each other for the duration of the agreement.
For a Joint IVA to stand a chance of success, the applicants will need to commit themselves to their common position for the duration of their IVAs.
Deciding to separate mid-way through a Joint IVA could cause one or both IVAs to fail, which should be avoided at costs.
There is no technical requirement for the Joint IVA applicants to be husband or wife, partners or even family.
They can be any two people who happen to be experiencing serious financial problems whilst sharing a common household expenditure.
Also, many people who live together find it convenient to be financially linked through joint bank accounts, loans and credit cards. Obviously, this can create potential problems if they hit financial troubles.
So it will come as some relief to learn that Joint IVAs deal with 'Joint and Several' liability debts very effectively indeed.
These are debts where both parties named on the credit agreement are jointly liable for the full outstanding balance until the full debt has been repaid.
'Joint and Several' debts can cause all sorts of issues when two people with financial problems are trying to negotiate their own terms individually.
The team here at IVA.org are IVA specialists. Please call us if there are any aspects of the IVA process that you'd like to explore.
Our helpline is available until 10pm every evening, so call 0800 856 8569 or complete this form to speak to an adviser.