a few questions about a joint IVA

[m_s]

Hi
I have a joint Iva with my wife. We have a few questions.
1. Is it true that although if times become hard abd it is difficult to meet the repayments the minimum repayment in an IVA must be 25p in the £.
2. As a proportion of the repayment goes to the IP as feees in our case 40% of our repayment is the fees, are you allowed to change IP after the IVA has been running for over a year.
3. is there any way a joint IVA can be legally turned into one agaisnt a sole person, ie one of the persons involved agrees to take on the responsibility for the whole debt / arrangement.
Many thanks

[Oliver]

Hello

The minimum dividend will be set at the initial agreement but if your circumstances do changed the amount could be varied up and down with the agreement of your creditors. The 25% figure is a figure that is used in the industry as the majority of creditors set this as their bottom line when looking at IVA proposals. However, you will need to pay your creditors to the best of your ability and if your dividend is set at 40p in the pound then this can only be varied down with the acceptance of your creditors.

It is possible to change IP but this is a notoriously difficult process and will involve court proceedings which can be very expensive. Is there any reason you would wish to change IPs?

A interlocking IVA can be split but this will be at the discretion of the IP and the creditors. If a debt is taken jointly it would be unlikely for a creditor to allow just one party to become responsible for it's payment as that would be reducing the security of the loan.

[MelanieGiles]

Hi there

Oliver has ably answered your questions, but just to remphasise that changing your IP is not really an option. Are you struggling to meet your payments at the moment and, if so, have you discussed this with your IP?

[m_s]

We had wondered whether in changing the IP this would enable us to find one who charges less fees, guess this isn't really an option as the cost of the court fees would make it not worth while.

As regards the debt it is all mine it just happened at the time some of our joint accounts were involved in the iva. I was asked if i wanted to try and do a dmp for my wifes side because the amouunt agaisnt her name is a very small percentage of the total debt, however at the time i couldn't see how i could repay an iva and a dmp at the same time. I realise now it would probably have been realatively straight forward and the dmp would have been considred wehen drawing up the finances for the iva. our IP didn't explain this to us.

thanks for you answers and advice

[MelanieGiles]

You would pay the same contributions, regardless of the level of fees, unless of course you have agreed to pay back the creditors in full.

It sounds as if proper consideration was not given to your wife's position when the IVA proposals were being drawn up, and there is nothing to stop your wife pulling out now, but you will still need to pay the dividend pledged under the IVA to your creditors, and how will she deal with her debts (ie the joint ones) if she does not have the protection of the IVA?

[m_s]

Hi
if there are two people in a joint iva and one member agrees to take on the whole debt, surely this would free the other member from the financial constraints.

[MelanieGiles]

You cannot transfer debts from one party to another whilst in an IVA I am afraid.

[m_s]

Hi
does that mean that in a joint iva if it was to face bankruptcy both members would have to go bankrupt? unless we had already removed my wife like we spoke last week. Or is that not woth doing as she would still get caught up in the joint debts even if we removed her from the iva and had a seperate dmp for these debts?

[MelanieGiles]

You are both responsible for your own personal debts and both responsible for all of the joint debts. The fact that you are in interlocking IVAs does not affect this, and it does not mean that if one of you were to go bankrupt the other one would automatically have to follow suit.