Joint and several accounts after single IVA

[Max]

I had a letter this morning from our former bank demanding repayment of an overdraft (in part created by the bank taking repayments when there was no money in the account) and for a loan. The total £2000. Both these sums were included in the IVA but fortunately Tom at Melanie's office warned us that what the Bank has done will happen as it were and thus we were prepared - my mother is going to pay it. In effect the bank will now be paid twice - I am not worried about that as, as I have said, Tom forewarned us. What would have happened if first we were not forewarned and second, if the debt could not have been repaid to the bank? I do not work so in my own right I could not pay. Will be interested to see what people's views are. J

[Max]

Forgot - the IVA is in my husband's name. J

[Michael Peoples]

You would have had to pay what you could afford each month toward the liability and the IVA would have also paid a dividend to them. Eventually the debt would have been repaid but the bank could continue to charge you interest or register the debt against your equity in the marital home.

It might be worth offering the bank a short settlement less than the total outstanding which would at least take into account any dividends paid from your husband's IVA. Given that you are not working and the debt is being paid by a third party the bank may accept a reduction on the full amount owing.

[David Mond]

If the bank want full settlement now then the dividends from your husband's IVA will go back to you by way of subrogation. So don't worry they won't get paid twice.

[wonder]

I thought if it was included in IVA you didnt have to pay it as it is being paid through IVA. Confused!?!

[kallis3]

It might be worth them having a word with the bank though David.

If you don't ask, you don't get!

[Max]

Thanks for your responses for once D and I are not worried - that makes a change!!!!!! We are going to try knocking off the dividend of 38p in the pound and see whether they will accept that. My mother is going to enjoy herself - she is like Jan - if she speaks to them will they know it! We could do with Jan's loud voice - we are both quiet individuals! J

[johnnybriggs]

Hi Wonder

Joint and several liablity means that if one party to a debt goes into an IVA (or bankrupt or refuses to pay or whatever) the whole of that debt then falls on the other party. Many people think they will only have to pay "their half".

[Max]

Yes, that is what Tom from Melanie's office told us so thankfully we were prepared. It could come as quite a shock to some who did not know that. J

[wonder]

I see, In know why now. I was panicking thinking they'd write saying they wanted payment. We have both gone for IVA as we had some joint debts (otherwise I wouldn't have had IVA) So ours is all sorted and apart from recieving letters still asking for payment we should be ok.

[kallis3]

J - Are you trying to say I'm loud?[:D][:D]

Wonder - if your joint debts are being serviced by your IVA's, you shouldn't get any letters demanding payment. We have joint debts in ours and have never had any letters asking for payment.

[Max]

You told my husband you had a loud voice!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Max]

Jan, I am not in an IVA only David - anyway they have got the figures wrong! Tom from Melanie's office adivsed me that I would be held responsible for joint and several but the bank has a little problem - they paid an account which they should not have paid for a start and they cannot read their own statements! This one Jan I will enjoy! J

[Max]

Just a query for Melanie - I am going to take off the diviend of 38p in the pound and see what happens - if they accept it all well and good - if they don't then they will still get paid. Do you then take out from the IVA that portion of the debt to the bank? J

[MelanieGiles]

Don't forget that they will only get the 38p over the next five years, so they may refuse your offer and expect you to pay this all off in full. If this happens, then the debt will be removed from David's IVA.