Joint IVAs

While an Individual Voluntary Agreement (IVA) is aimed at individuals in financial difficulties (as the name suggests), there may be instances whereby cohabiting couples, who share living costs, could combine their debts to have a 'Joint IVA', or an Interlocking IVA.

Joint and Several Liability

It is important to bear in mind that such an IVA is technically two separate IVAs. The reason for this is to do with the Joint and Several Liability rule. If there is a debt in joint names then both individuals are liable for the full amount of the debt. Therefore the full amount needs to be listed on each IVA, not just half of it. But by combining the two into one single application, there are fewer costs associated, and therefore more of the monthly contribution will be paid to the creditors, ultimately leading to a higher likelihood of the IVA being accepted.

Criteria

As an interlocking IVA is two separate IVAs, each individual will still need to match the criteria required. They will both be required to be insolvent (i.e. income does not cover living costs and repayments to debt) and at least one of them should have at least £12,000 of unsecured debt. Sometimes it is advisable for one of the couple to go for an IVA and the other a Debt Management Plan, but often finances are so interlocking that they are best to present joint debts, income and outgoings.

Who would benefit?

An Interlocking IVA is ideal for couples or spouses that have found themselves in financial difficulty, especially as the overall monthly contribution will be more easily afforded between two. An Interlocking IVA could still be applies to individuals that just cohabit (eg a lodger or housemate), but due to the length of the IVA (5 to 6 years) it is important that the individuals appreciate the implications of being financially dependent.