What is the best way for me to take full responsibility for a joint bank account ?

[Mickdh50]

Hi,
I recently entered an IVA (first payments in Nov 2015)but an issue has come to light by one of the creditors of the IVA; it's the joint bank account I had with my wife. They have now contacted my wife asking for full settlement of the balance that was outstanding even though it's part of my IVA repayments. I am willing to take over full responsibility for the account (which I thought I had) in order to stop them pursuing my wife. All the money in my household is accounted for every month so there isn't anything spare to pay them and I don't want my wife having to enter an IVA. Is there a process with an outcome that has been had by others? Is there a letter template for the Creditor?
Any help and guidance would be welcome.
PS: I have spoken to my IVA company and they say contact the bank...OK, but is there a certain way of doing it? that's what I'm asking.
Many Thanks.

[kallis3]

Hi and welcome,

Unfortunately your wife will be responsible for her half of the account and you won't be able to take over the full account. She will have to try and make an arrangement with the bank to pay so much off a month until the end of the IVA.

Speak to your IP and see if a payment can be taken into account with your I&E.

This should have been explained at the outset.

[relieved33]

Kallis, I thought the wife could be asked for the full amount of an overdraft on a current account, not just half. I believe someone has said before they xan pay it off and then become a creditor of yours. Your IP should ttake this expenditure in to account though I think.

[relieved33]

Mickdh50, I believe the term is joint and several liability giving the creditors the choice of who to claim the money from. I would be extremely surprised if they would allow a debt to be given to someone who has already declared themselves insolvent.

Who are you with? They should have explained this to you before you entered the iva. Although it is an individual arrangement, there are further implications for partners that iva companies should have the obligation to explain in detail.

[lifenoteasy]

Joint account - liable for each other should one default.

Like others I'm surprised your iva company did not explain this.

They have basically passed the buck.

[hubert]

Hi,

I have been in exactly the same circumstances.

I was under the (mistaken) impression that once the overdraft was being paid off via the IVA they'd leave my wife alone.

Bear with me, I might ramble a bit here...

An overdraft on a joint account is the responsibility of both account holders. They are both liable for all of it.

She owes the whole amount and so do you (not half each).

The bank is doing what it can to get the money back.

However, there is only one debt. Therefore, whoever makes a payment, the one debt reduces. So as your IVA company make dividend payments, the debt will reduce.

Now - a very important point. You should never use any of your own personal surplus income to pay anything off the debt, even on your wife's behalf. To do so is "creditor favouritism" and unfair to other creditors. You are paying through the IVA fairly and that's that.

In my opinion, your wife needs to make an offer to pay it back monthly and ask for them to freeze the interest (which is a pretty standard request).

My advice is for her to answer them promptly, in writing only (not email/phone) and keep all correspondence. Make an offer to pay and explain that it's as much as you can comfortably afford each month. Ask for them to freeze the interest, which is a very normal thing to ask for.

My wife has been paying £8 a month for 2.5 years now with no issue.

Alternatively, if you are in a position to do so, your wife can pay off the debt completely. She will then actually take the creditors place in the IVA, receive dividend payments and get to vote! I don't know much about how this works but it does happen - experts on here like Michael Peoples I believe know more about this.

Above all, do not panic, worry or fret. But know that you cannot take this away from your wife and she must deal with it. However, you will only likely be able to pay a small amount. They will know about the IVA and accept it I'm sure.

We worded the letter something like "...as you will appreciate, all household income is spoken for in an IVA leaving very little surplus. The most I can offer to pay at this time is £8 per month. My husband's IVA is subject to annual reviews and I will contact you if my circumstances change."

Hope this helps, keep us posted!

[hubert]

ps.. an afterthought [:D]

Remember, if you've made reasonable offers to pay in writing to someone you owe money to, they have very little recourse other than to accept it.

Imagine a court case - "This man owes us money and is offering to pay it back, I demand justice!" [:D]

Only worth their while if they truly believe you're stashing away wads of cash and offering them a deliberately paltry amount.

[Lisa Thomas]

Unfortunately its joint and several debt - the Bank can pursue whichever party they want to or both parties.

Due to your IVA they are now, legally, chasing your wife for the full amount and I'm afraid she will have to deal with this one way or another.

If she pays it she can then argue she has a subrogated claim in your IVA and can probably try to claim 50% back but I suspect even if she jumps through all those hoops she will at the bottom of the pile as she is your spouse.

Even if this point was overlooked and she was allowed to claim as an ordinary creditor alongside all the others she would only get the same dividend back as your other creditors, which I presume will not be in full.

[mick8468]

Many Thanks to all who have replied especially 'Hubert' - good guidance.
I guess the lesson here is 'beware those joint accounts'
Spoke with my IP provider, Aperture (Grant Thornton)- not interested! Seems it's my fault for not letting them know it was a joint account!...and there supposed to be professional advisors!! Should it not be a standard ‘tickbox’ question for all IP companies - 'Do you have any joint bank, loan, credit or Hire Purchase agreements?' - Or maybe it's just me?

[relieved33]

I totally agree. They should askfor the full name of the account at the very least!

[kallis3]

I was never asked for that but was always aware that we were both aware that we were liable for these.

Surely, when you fill in your form you should put down everything, including joint accounts?

[hubert]

You're welcome

In my case I was a bit annoyed that it wasn't made clearer to me during the IVA process. However, to be fair they did mention it but it didn't really sink in...

[Lisa Thomas]

That's strange the list we provide specifically asks you to identify any joint debts, I'd be surprised if this wasn't included somewhere on GTs original paperwork to you.

Its a shame the person you spoke to wasn't particularly helpful but to be slightly fair to them there is little they can do, although it sounds as if they could have dealt with you a bit more sympathetically!