I have a joint account with my wife and an overdraft of about £4,000 (Within the agreed limits)
I understand this is normally considered as a creditor, but my wife is being asked as part of my IVA proposal to cover the overdraft with a loan or find the money from other means etc.
If my wife pays the debt, is the bank still classed as a creditor?
If it is, then why is she paying, if it isnt, will I be able to keep my bank account (Minus the overdraft of course)
When you take out borrowings jointly, you are both jointly and severally liable for repaying the whole amount. If one of the parties who is jointly responsible pays off the debt, then it is no longer a creditor.
I assumt that your IP has highlighted this to you, in that once you have entered into your IVA, this will leave your wife exposed to borrowing that she will be required to repay.
That will be a decision for the bank. If you have other debt with this company, it would be risky to retain current account facilities with it, as they could retain your salary against the amounts that you owe, which would leave you in a position where you had no money to pay your bills.
thanks Melanie. I only have the overdraft which i am hoping to pay off - I reduced it by a third in Dec (despite Xmas) and hope to clear it all within the next two months (or less)
i dont have any other account as yet, and will sit tight i think.
If the debt is paid off, then I am sure that there will be no problem with you retaining the account. Perhaps this is one of the reasons why this was suggested by your IP.
i have spoken to my ip and clarified a few things with this. Obviously it is a joint account, so if i dont pay the overdraft back, then my wife will. I was unsure if my IVA settlement (Whatever that is in the pound) would reduce my wifes committment and it seems it does.
However, i have decided its all out war on getting the overdraft down to nothing before my IVA is proposed.
It will do several things
a) the bank wont be creditors and probably wont know i am in an iva even. This MIGHT mean i can keep my accoutn as i have no other credit with them.It also means i dont have to move my direct debits etc
b) one less creditor
c) it decreases my total debt, and makes my proposed repaymeny a higher percentage repayment (A higher pence in the pound figure, which takes me above a psychological barrier and potentially means the proposal is more likely to be accepted.
Either way - im on a mission as i say!
hope this helps to clarify the situation for anyone else who may be in the same position
You seem to have it all sorted! I hope it all goes ok for you.
If your bank is HSBC or First Direct, you will probably have to change banks anyway as they have a habit of closing accounts of people with IVAs.
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
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
