Advice please?

[Jinx]

Hi all,

My new girlfriend had a joint loan with her ex boyfriend for approx £25,000 the majority of which was to consolidate his debt. Since they have split up he has entered into an IVA in which this loan is included.

After they broke up he stopped making payments on the joint loan. The bank have the begun to chase her for the full payments on the loan which she could not afford on her own. She has entered into a payment agreement with the bank to make a minimum payment every month which has now been passed to a debt management company.

My question is that as he is in an IVA as an individual, can the bank still enforce full payment of the loan from her?

Any advice is greatly appreciated.

Thanks,

Jinx!

[MelanieGiles]

Yes - if they were jointly and severally liable for the loan, which it sounds as if they were.

[Jinx]

Yes it was a joint loan signed by both parties.

What does Severally liable mean?

Can he enter a joint loan into an iva without her permission though?

[MelanieGiles]

It means that they are both separately liable for the whole amount due. And yes he can enter into an IVA without consulting his ex-partner, although that sort of behaviour is not terribly helpful.

[Michael Peoples]

Your girlfriend should contact her ex's IP as she may be entitled to claim in his IVA if she is having to repay the joint loan. If she does not know who the IP is she can run a check on the insolvency register.

[Jinx]

Thanks for clarification Melanie, So thats how the banks make their money!

Hi Michael, She has contact DFD but they will only confirm he is in an IVA & that the joint loan is included in it. What do you mean by claim in his IVA? You mean become an additional creditor?

[Michael Peoples]

If the loan is listed for dividend calculation and your girlfriend has to pay it off there is a potential for what is called subrogation. This means that if your girlfriend clears the debt she now effectively stands in the shoes of the creditor and is entitled to that creditor's dividend. She should speak to DFD again and possibly have a word with one of their IPs.

[thefsg]

We have a similar situation, although we are still together.

My wife, who is not in an IVA, is jointly and severally liable for our joint account overdraft (part of my IVA) and is in discussions with the bank.

If she is forced or decides to pay the total overdraft off, our IP has indicated that she would receive the bank's dividend from my IVA payments; this I'm told is called subrogation whereby another person takes the place of a creditor.

[MelanieGiles]

This is a right in equity and not in law, but his IP ought to take notice of your partner's position and may allow her to claim subrogated rights.