joint account overdraft, interlocking IVA

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Nicola.sa

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Post by Nicola.sa » Mon Aug 16, 2010 10:58 pm
So....I understand that in interlocking IVAs each individual is accountable for the FULL amount of the joint overdraft. What I don't really understand is doesn't this mean that this creditor is getting paid twice which in turn shows preference to this creditor over the others?
 
 

MelanieGiles

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Post by MelanieGiles » Mon Aug 16, 2010 11:07 pm
Joint and several debts are always joint and several - although in interlocking arrangements they only get one dividend. In the event of non-interlocking IVAs, the creditor is perfectly entitled to get a dividend from each estate - that is the whole point of them seeking joint and several commitment from their borrowers, so this is not preferential treatment.
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Nicola.sa

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Post by Nicola.sa » Mon Aug 16, 2010 11:27 pm
So, in interlocking IVAs when totalling up each individuals debt the joint account is counted as if each person owes the whole amount however re payment they only get one dividend? Sorry if I've got this wrong again! x
 
 

MelanieGiles

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Post by MelanieGiles » Tue Aug 17, 2010 12:35 am
That's correct - but they only get one payment and not two if the IVA is interlocking.
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Nicola.sa

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Post by Nicola.sa » Tue Aug 17, 2010 12:49 am
Thanks Mel, I understand now! x
 
 

kallis3

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Post by kallis3 » Tue Aug 17, 2010 8:39 am
Ours aren't interlocking as we make two seperate payments. Hubby's debts were all joint with mine, plus I had credit and store cards as well. Would that be the reason why they weren't interlocking?
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MelanieGiles

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Post by MelanieGiles » Tue Aug 17, 2010 9:22 pm
No - the reason would be that you could both afford to make a realistic contribution in your own right, thereby giving joint creditors a slice of both pies.
Regards, Melanie Giles, Insolvency Practitioner
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