IVAs and Divorce

Relationships can break down for many reasons, and if you’re in an Individual Voluntary Arrangement (IVA), it’s important to understand how separation or divorce could affect your finances and your plan.

Whether your IVA is joint or individual, here’s what you need to know.

Will a divorce affect my IVA?

Yes – separation can impact your ability to maintain your IVA, especially if your household income changes or you’re no longer splitting bills with your partner.

If you’re going through a separation or divorce:

• Contact your Insolvency Practitioner (IP) as soon as possible.
• Your payments may be reduced to reflect your new circumstances.
• If the IVA is no longer sustainable, you may be able to switch to an alternative debt solution.

Open and early communication with your IP is key to keeping your options open.

What happens if we have interlocking IVAs and are getting divorced?

Interlocking IVAs are joint arrangements where two individuals’ debts and household finances are managed through a single, combined plan.

If you and your partner are divorcing:

• Your joint budget will likely no longer reflect your new living situation.
• Two separate households means higher overall expenses.
• This could make the original IVA unaffordable.

You may be able to:

• Split the interlocking IVA into two individual arrangements, with each person taking on their share.
• If splitting isn’t viable, the joint IVA may need to be terminated and replaced with individual debt solutions.

Check the terms of your IVA or speak to your IP to see if splitting the agreement is an option.

What if I have a sole IVA and I’m getting divorced?

If you have a sole IVA and your repayments were based on shared household costs:

• You may now struggle to keep up with your IVA due to higher living expenses.
• Contact your IP to discuss a potential reduction in payments, a payment break or a variation of terms.

If the IVA can’t continue, your IP can advise you on alternative solutions, such as a DRO or bankruptcy, depending on your new financial situation.

How will divorce and an IVA affect my property?

Your property may be affected if you and your ex-partner decide to sell your home. If you do sell your home during your IVA, you can retain 100% of your share of the equity under the 2025 IVA Protocol[1]. For IVAs which were approved before July 2025, please refer to your IVA Proposal to understand how your home will be treated.

Speak to your IP before taking any action involving the property – especially if it’s jointly owned.

Can an IVA help with divorce payments?

No, an IVA can’t cover legal fees or new debts incurred after the IVA was approved. Any new financial obligations, including divorce-related costs, can’t be added to your existing IVA.

However, your IP may be able to:

• Help you create a revised budget.
• Offer suggestions for making your IVA affordable while covering other essential costs.
• Discuss options like a lump sum settlement if your circumstances or finances have changed significantly.

Need help navigating divorce and debt?

At PayPlan, we offer confidential and impartial debt advice, even during major life changes like separation and divorce. Let’s work through this together.

Call us on 0800 316 1833, chat with us online at www.payplan.com or message us on WhatsApp.

[1] The 2025 protocol only applies for IVAs approved after July 2025. Previous IVA protocols apply for IVAs approved before then.