David and Sarah have been married for 5 years and during this time each had accumulated debt. Apart from their joint £500 overdraft, David had a loan and a credit card and Sarah was slightly embarrassed to admit she had 10 debts spread over credit/store cards and catalogues. The total of all debts was around £16000, and they calculated they were paying almost £500/month to service these debts.

 Recognising they were getting into ever-deeper trouble they sought help via online research and a conversation with a debt help company. Their preferred route was by way of a joint (interlocking) IVA. They calculated they had £200/month spare after all necessary and reasonable expenses were taken into account. It sounded like a good plan – until during further discussions with an advisor, the amount of debt each owed was revealed. Despite the number of creditors – Sarah’s debts were all relatively small – in fact totalling little more than £1000. It was David’s two debts that made up the majority.

Initially they were disappointed to discover that due to Sarah’s debt level – she didn’t qualify for an IVA and despite the combined debts – a joint IVA still has to work for each individual. (Note – it’s always worth taking advice on these situations from an authorised advisor – to double check as different circumstances may lead to different options).  

However, there was nothing to stop David applying for an IVA just for his debts. Their salaries were similar, so each had a £100 share of the joint disposable income). David offered a £100/month payment in a single IVA and Sarah went for a Debt Management Plan at £100/month with the realistic hope of clearing her debts in much less than 2 years. The joint overdraft had to be included in both plans, but they were both delighted with the outcome.

Of course it helped that their incomes were the same. Had they been different, creditors would have expected a pro rata share of the joint disposable income. For example, if David’s income were £1800/month and Sarah’s income £1200, the £200 joint disposable income would have led to David offering £120 in the IVA and Sarah £80 to her creditors through some informal repayment plan.