Hi,
Can I ask a question about an overdraft on a joint account when an IVA is entered into by only one of the account holders.
I realise that the bank will chase the other holder for the outstanding amount, but if the overdraft was included as a debt in the original IVA can the bank simply ignore this and chase the other (non IVA) account holder for the whole amount?
Thanks.
I would think it best to separate the bank accounts asap-pretty sure the bank might try for the money if in joint names as you are jointly responsible for the debt.
Changing banks altogether would be your best bet
Last edited by andrea1968 on Sun Jan 30, 2011 12:21 am, edited 1 time in total.
full and final accepted January 2015
iva agreed; August 2010
iva would have completed; August 2017
extra year thank's to NRAM
andrea1968 wrote:
I would think it best to separate the bank accounts asap-pretty sure the bank might try for the money if in joint names as you are jointly responsible for the debt.
Changing banks altogether would be your best bet
Too late for that, IVA already been up and running for a few years and account not split. Bank is trying for the money I'm just not sure if the way they are doing it is corret/legal? The Overdraft was in the IVA from the beginning yet they are ignoring that and chasing the non-IVA account holder for the full amount, is this right? I know at the end of the day it won't make that much difference as they will get all their money back it's just where/ who will be paying it.
Thanks.
catflap-speak to your iva provider about it as we moved our joint account sharpish when we went for the iva-4k overdraft and 5k loan on the account-you dont have to tell them you are moving it.
We are with think banking who will give you an account number immediately over the phone.They do charge a monthly fee for 2 account holders with a mastercard for 19.50 or with one card around 13.50.
Good luck.
full and final accepted January 2015
iva agreed; August 2010
iva would have completed; August 2017
extra year thank's to NRAM
The bank are well within their rights to chase the non-IVA partner. When you set up the overdraft it will have been with joint and several liability. You are jointly and individually responsible for the full balance. Now you have defaulted, they will pursue your partner.
I'm surprised this was not explained to you at the outset of your IVA as one partner becoming insolvent can have serious consequences for anyone with joint debt as they become solely responsible for managing the account.
Your dividend payments will reduce the outstanding balance, but your partner is responsible for managing the account as the bank want to see it managed.
The non IVA partner will be pursued for the whole debt even though it is included.
Once the IVA is finished the bank will receive a dividend which will be knocked off the total owed so you will find that you won't end up paying everything.
Doesn't matter whether you move accounts or not now as this debt is still there and the account won't be closed.
If you did want to go to another bank, try the Co-op. They are IVA sympathetic and free. The money you would pay towards a fee charging bank could be going towards paying the overdraft off.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
The account was closed 18 months into the IVA and the debt was sold in the non IVA holders name only to a debt collection agency who are obviously are chasing the whole amount. The IVA company have the debt in the agreement but are not going to pay a dividend to the original bank as the debt appears to now be with the DCA (they did try but it got a bit messy with the dividend going from one company to another and eventually being returned to the IP as the DCA only recocognise the non IVA account holder, they don't even know the account was a joint account originally!). Is this right or can I insist a dividend is paid from the IVA? Are the bank allowed to sell the debt in a single name when it's in an IVA?
Thanks.
There will be a dividend paid to whoever now owns the account. Most debts are sold on to companies such as Maxdebt who buy it for a pittance and are happy for anything they get back.
With joint debts then you are both jointly and severally liable for the debt and the non IVA partner will be pursued.
This should have been explained to you from the outset though.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
Both parties are jointly and severally liable for the debt, so yes, the bank is acting legally. It might be worth speaking to the bank to ask if they will accept reduced payments from the party not in the IVA to clear this debt.
But can / should the IVA pay a dividend to this creditor. Because as it stands it isn't! The IP tried to pay a dividend to the DCA but as they think the debt is in a single name they refused it and returned it. Can the bank sell the debt on in a single name, i.e. cut out the person in the IVA completely?
The creditor who now owns the debt will get a dividend from it. The non iva person will continue paying towards it. You will never pay back more than the original amount though.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
This sounds like an error in how the debt was sold. The bank and DCA need to rectify the error so DCA can start accepting dividends. I would suggest the bank are at fault and cannot just remove you from the account.
As it stands, DCA cannot accept dividends from you, anymore than they could from me. You have been pushed out of the loop on this and need it rectified.
I'm not sure who you go to. Your IP may have an idea. The FSA and the Financial Ombudsman would be worth a google to see if they can help.
The bank can't ignore the IVA, but the person who is not in an IVA is still responsible for the overdraft.
Sharing from experiences of dealing with debt
The greatness of a man is not in how much wealth he acquires, but in his integrity and his ability to affect those around him positively.
Bob Marley. http://kallis3.blogs.iva.co.uk
