My ex-husband took out a joint loan a week before he left me 2 years ago.
We have since divorced and I have a consent order that states he must indemnify me from the loan, and take over full and sole responsibility. Unfortunately, despite me requesting to be removed from the loan numerous times, he failed to do so and now has an IVA in place (started last month). I have had no correspondence from IVA or Bank of Scotland (with whom the loan is with) regarding this, and I feel fully exposed to a huge debt for which I have never had a penny (or seen any correspondence about until now). All correspondence was sent for his attention, and not to us both.
I have now received a letter from a debt collection agency demanding the full balance - just over £21k.
Because I have a consent order in place which is meant to protect me, what is my position and how can I stop the debt collection agency chasing me?
I'm at my wit's end, so anything you can do to advise is much appreciated. Thanks.
Well the consent order does not bind the creditor at all, so strictly speaking they could pursue you for the balance but the lack of correspondence from them suggests that they are not going to do this.
What does the lawyer who drew up the consent order for you have to say?
I haven't yet spoken with my lawyer as only found out about the situation on Friday night when I came home to a letter from the debt collection agency. I've since spoken with CAB and my ex-husband to try and find out the facts.
I know it doesn't bind the creditor, but it should bind him surely to pay for the debt he racked up?!! I might as well be burning money!
I have been told via his IVA (and him) that I should be covered because I can get the consent order enforced and make him pay - he is after all paying back part of the loan already via the IVA and as per the consent order, should be paying it back in it's entirety - especially because he hasn't adhered to the consent order. Is this not correct?
I also don't understand how he could get an IVA for this joint loan without any consent from myself in this particular matter as it severely effects me. Surely this can't be right!!
Any thoughts are really very much appreciated - it's a terrible situation.
I am not a legal expert, so do take advice from your lawyer, but I still believe that you are jointly and severally liable for this debt - especially as he has entered into insolvency proceedings.
If the creditor will not get repaid in full from his IVA, then I am sure that they will still be entitled to collect from you, and he would not legally have needed your consent to enter into the agreement - albeit morally and ethically this would have been the right thing to do.
Take legal advice at the earliest opportunity to set your mind at rest.
Speak to your lawyer first. Also as your former husband has indemnified you to take over that debt you are a creditor within his IVA. Were you served with the papers? Would this amount exceed 25% of what your husband owed? You might, if yes, and received no notification be able to claim a material irregularity. Discuss all of this with your solicitor. Let us know how you get on.
Last edited by David Mond on Tue Jan 13, 2009 5:15 am, edited 1 time in total.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
I might be being daft from your reply David, but just to clarify that I was meant to be indemnified from the loan (not him) so that HE had to pay the entire debt back. But, in answer to your question, he's meant to be paying back 45p in the £1, which means that there's 55p in the £1 outstanding - and I'm presuming will fall onto me.
I'll speak with my divorce lawyer and see what they say.
It is quite easy for him to get an IVA on the joint loan without your permission.
As Melanie says, you then become liable for the whole amount of the debt, not just half.
Once the IVA has finished though and he has paid his half, I have no idea what happens to the rest.
One of the professional experts can probably advise later.
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 position is that you think that your husband has taken over the loan, in accordance with the terms of the consent order, and therefore thisw would not give rise to you having a claim in his IVA, that could only arise if you took over the loan, which under the principle of joint and several liability will be the case.
If you have to pay off all of the loan, you may have a claim under the law of equity against your husband - but this is not always guaranteed. As David says you ought to prove in the IVA, in case you want to invoke this at a later stage.
Regards, David Mond, Insolvency Practitioner for over 46 years. Personal Insolvency Practitioner of the year 2012, Personal Insolvency Practitioner of the year finalist 2013 & 2014 awarded by Insolvency & Rescue Magazine and 2015 finalist for Personal Insolvency Firm of the Year.
