Joint (interlocking) IVA’s

If an individual has a financial connection to another person – for example their spouse, child or civil partner – it may be possible for them to propose what are known as interlocking IVAs to deal with their debts together.

Whilst interlocking IVAs consist of two separate proposals – one for each person – they result in one arrangement and one contribution will be made in offer of repayment to both person’s debts. This does not mean that the each individual is taking responsibility for the other’s debts and you would not become liable for any debt other than your own.

The main advantages of this are that the two individuals will be charged only one set of fees to the Arrangement and creditors may get a better return on what they owe than if two individual arrangements where proposed. It also allows those individuals to make one, combined monthly payment between them which can make it easier to manage, particularly if you are used to managing your finances together. It also offers the opportunity for people who have a strong financial connection with each other to deal with their debts together and can enable them to plan for their financial future more effectively.

One thing to consider is that the success of the arrangement has a reliance on both of the individual’s creditors approving the IVA and then both individual’s maintaining their obligations. There is a risk that if one person does not comply the other may be affected. However, it is sometimes possible to resolve this by proposing a variation to the Proposal to split the Arrangements and continue as two separate IVA’s to remove the dependency on each other.