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My sister separated from her last year (they are still married). They have sold their property and all that is outstanding is a joint loan (which was to cover his debt). He is unable to pay due to loss of job and my sister is unable to keep meeting the high repayments every month. If he applies for an iva how would it affect her? She has just bought a property with her new partner and is worried about the implicattions this may have.

They are jointly liable for the debt, so the creditor can pursue both of them for up to the whole debt. If he applies for an IVA then the creditors will only get a proportion of their money back, and the joint creditor will look to her to continue making the repayments.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

Hello Rainyday,

If he enters into an IVA your sister will then be liable for full payment of the debt as her husband's half will be covered by the IVA.

Best Regards,
IVA Experts
http://www.iva-experts.co.uk/

I'm a bit confused with this:

Sisters hubby goes into IVA - is this ignored for IVA purposes, because if sister pays the full debt, and the debtor gets a dividend based on the hubby's IVA, then is the debtor not getting full payment + dividend, which is more than the amount owed anyway?

Just trying to understand the system!!!

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Although the loan is in both names it is for his debt so would that qualify as part of an IVA? Also could any creditors go after her home, or would it affect her credit rating?

If it is a joint debt, then the creditor can go after either party for payment. If one party enters into an IVA and includes the debt, the creditor can still go after the other party for the full amount of the debt

The creditor will claim both in the IVA and against the non-IVA partner, up until the point where they have been paid in full, but they won't get paid twice.

Philip Beck - www.freeivaadvice.co.uk

Licensed Insolvency Practitioner and IVA specialist

thanks for your help. As I understand it then my sister would have to continue paying it whatever happens then?

That's about the upshot of it really - and this highlights the danger of taking out joint liabilities and the implications of one party not paying their share.

Regards, Melanie Giles, Insolvency Practitioner for over 20 years.

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