I have debts around £43k

[peter263]

I have debts around £43k with 7 creditors. I also have a HP on my car and paying just the interest on my mortgage at present. I have outstanding debt to HMRC self assessment of £1500 and corporation tax of £1901 for a business I no longer trade from.

I’ve been employed paying PAYE since 2018 and I’m on Furlough and when I return to work 1 July I will be in a new role which will see a reduction of salary of £5k per annum.

I am joint on the mortgage with my wife but I’m looking at an IVA in my name only.

How will the IVA work specifically in relation to how they would calculate my share of household costs etc in order to determine how much I would pay into the IVA and would my wife be liable to make any payments into the IVA?

I also have a deduction of salary for my pension contribution of 3% which is the minimum amount and this is done as salary sacrifice.

[Foggy]

Expenses are generally worked out as pro rata to income. So, if your wife earns more than you, she would be expected to pay a relatively larger share of the expenses. If she refuses to disclose her income for your IVA ( which she is entitled to do) the IP will assume a 50/50 split (so,will assume she earns roughly the same).

Ordinarily the solvent partner will not be expected to contribute towards an insolvent partners IVA payments, although they are sometimes asked to if the insolvent partner cannot make sufficiently large payments to make the IVA viable. In the past ( I do not know if they still do this ) one firm in particular used to calculate IVA payments based on household income ( meaning everyone in the household contributed ). But this was a quirk of theirs and not the norm.

As a joint owner of a property, you will be expected (and contracted) to explore equity release towards the end of the arrangement, based on your share of potential equity (usually 50%) and a restriction will be placed on the title at Land Registry.

Also, remember that any joint debts will become the sole responsibility, in full, of the solvent partner.

[Lisa Thomas]

As Foggy states your disposable income is usually calculated pro rata between you both , if not it is assumed to be 50:50.

Don't forget to explore whether Bankruptcy is a better option for you.