IVAs and DivorceMarriages and relationships can break down for many reasons, and if you have an IVA in place it’s important to understand how this affects you and your ex-partner.
Will a divorce affect my IVA?Maybe – if your household incomes reduces as a result of you separating, then it may be difficult to continue to make your IVA payments.
Please contact your Insolvency Practitioner if this happens so they can look at options to help, one of which could be to reduce your payments to an affordable level. If the IVA is no longer suitable it is possible to look into another debt solutions, so don’t worry.
What happens if we have interlocking IVAs and are getting divorced?Your original IVA agreement could be affected because your monthly expenses may be higher – which can impact your IVA repayments. This is because instead of one set of monthly bills there will now be two that need to be considered.
Because of this, people divorcing with interlocking IVAs realise that they are unable to continue with the original agreement they initially set up. The IVA may have to be cancelled and an alternative debt solution arranged for each person.
So, it’s important you and your partner come to an agreement, whether this means continuing with an interlocking IVA and trying to make the repayments or even asking if your Insolvency Practitioner can split your agreement into two independent ones.
It’s important that you carefully check the contract of your IVA to see if this is an option first, If you are unsure, please contact your Insolvency Practitioner or IVA provider so they can help.
What happens if I have a sole IVA and I am getting a divorce?You may start to struggle to make your repayments, if your IVA relied on you splitting your bills each month with your partner.
If this happens, it’s important you speak to your Insolvency Practitioner to see if you can find a solution to continue making your IVA payments on top of your higher monthly bills. If you are unable to pay back your IVA and live comfortably, another debt solution may be worth considering which we can help you with.
How will an IVA and divorce affect my property?If you decide to sell your property, your share of the equity in your home may still need to be paid into your arrangement.
If you are looking at remortgaging whilst in your IVA, this can be difficult because of poor credit and it may be difficult to release any equity. If you are required to remortgage during the IVA and you are unable to, another year will be added to the IVA term to cover this.
Can an IVA help with divorce payments?No, any debts that are incurred after the date your IVA was originally accepted cannot be added to an IVA already in place, so it’s really important you make your Insolvency Practitioner aware of what is happening.
Your Insolvency Practitioner or IVA provider might be able to help you work out a better way to manage your monthly spending to ensure your IVA payments are not missed, while you continue to live as comfortably as possible and handle the legal side of your divorce.
Contact our team at PayPlan today for free impartial debt advice.
*In the case of a one-off lump sum settlement