Separation / divorce from spouse/partner when in an IVA IVA Issue
Summary: this article explores the implications for someone who is in an IVA (Individual Voluntary Arrangement) and who separates from their spouse/partner.
Financial Implications
One of the most obvious consequences of a relationship ending is the financial one. Where rent or mortgage was shared along with household bills, there are now potentially 2x sets of such outgoings. As with any change of financial circumstances it is important that your IVA supervisor is informed. The IVA was in all probability, calculated on the basis of total household income and outgoings and clearly a separation will have significant consequences for the continuation of the IVA.
Interlocking IVA's
When both parties to a relationship are involved in a joint IVA, either because they have debts in joint names or because each has brought debts in their own name to the IVA, the separation can have very serious implications. The interlocking nature of the IVA is now severed and advice will be needed to consider next steps. It may be that the IVA has to end and new solutions sought.
Making the IVA work
When an IVA is in a single name, then the changing financial circumstances caused by the separation will need to be worked through. Under some circumstances, you may well be able to continue the IVA, but the implications for income and outgoings will need to be assessed. As long as you can still afford to pay something back on your debts, then every effort will be made to accommodate the changing circumstances.
Assets
As well as a likely change of disposable income, any new situation regarding assets will need to be assessed. This especially relates to homeowners. The plans regarding the house will need to be discussed and the IVA supervisor will advise on the implications. If a property has to be sold then the resulting profit or loss will have an effect on the IVA.
New calculations
A separation affects not just household bills but other areas of finance. It may be that benefit-entitlement changes or child maintenance payments become an issue. A whole new income and outgoings statement will be needed to establish whether an IVA can continue and any changes to the payment level.