Home › IVA Guides › IVA & Joint Debts
IVA and Joint Debts: Interlocking IVAs Explained
If you have joint debts or a partner who is also in financial difficulty, there are specific rules about how this is handled in an IVA. Here is what you need to know.
Can Joint Debts Be Included in an IVA?
Yes - but only your share. When you enter an IVA, it covers your liability on any joint debt. The co-borrower remains fully liable for the entire balance, because a joint debt is a joint and several liability - each person is independently responsible for the full amount.
What Is an Interlocking IVA?
An interlocking IVA (also called a linked IVA) is where two people - typically partners or spouses - each enter a separate IVA at the same time with the same IP. Their arrangements are coordinated so that:
- Joint debts are addressed in both IVAs simultaneously
- The household income and expenditure are assessed together as a combined budget
- Each person makes their own individual IVA payment
- The same IP acts for both arrangements
- Both IVAs can include joint debts, with each arrangement covering that person's share
How Joint Household Income Is Assessed
Where two people live together, your IP will look at the total household income and expenditure when calculating your affordable monthly payment - even if only one partner is entering an IVA.
Your partner's income is not paid into your IVA, but it affects the budget calculation. Bills and costs are split proportionally based on each person's income contribution.
Example: One Partner in an IVA
Partner A earns £2,000/month net (in IVA). Partner B earns £1,500/month net (no IVA). Total household income: £3,500. Household essential bills: £1,800/month. Partner A's share: £1,800 x (2,000 / 3,500) = £1,029. Partner A's disposable income: £2,000 - £1,029 = £971. IVA payment is calculated from this disposable amount.
Does an IVA Affect My Partner's Credit File?
Your IVA appears on your credit file only - not your partner's. However, there are indirect effects:
- Any joint accounts in arrears appear on both credit files - this affects both parties
- Credit reference agencies may create a 'financial association' between you - future lenders can see this
- Future joint credit applications (e.g. a joint mortgage) will be assessed on both files - your IVA history will be visible
Joint Mortgage During an IVA
A joint mortgage is a secured debt and is not included in the IVA. Both borrowers continue making mortgage payments as normal. The lender cannot alter mortgage terms simply because one borrower enters an IVA, provided payments continue.
When Should Both Partners Consider an IVA?
An interlocking IVA may be the best approach if both partners have significant debts (personal and joint), both have income, and joint debts form a substantial part of the total liability.
Find Your Debt Solution
Use our free, no-obligation tool to find the best option for your circumstances.
Do You Qualify?Related Guides
This information is for general guidance only and does not constitute financial or legal advice. An IVA is a formal insolvency solution - fees apply and your credit rating will be affected. Seek independent professional advice before making any decisions.