Joint account

[LB22]

I’m just about to start an IVA. I have a joint acc with my husband, of which we are in the overdraft; so I cannot remove my name from the account.

What can I do to protect my husbands credit file whilst going into the IVA. It has nothing to do with him and therefore I need to try and keep him out of it.

My IVA advisor has told me to get my name removed from the account, however I cannot see how this is possible?!

Any advice welcome.

[Foggy]

I am afraid the overdraft will be included in your IVA, which will then fall to your husband to service entirely. As a result the account might well be closed, so I would advise both of you opening alternative seperate accounts. Also the bank may require the OD to be settled by your husband, so be prepared.

Is there any way for your husband to borrow a sum to settle the OD and then get you removed ?

[LB22]

Hi Foggy, thanks for the reply!

When you say husband to service by himself...would they still allow him to do this mo they or would they expect it upfront?

Would this be recorded on his credit file?

Many thanks

[Foggy]

It depends on the bank ( and their mood at the time). Best case scenario is that they allow him to operate the account on his own and service the OD as now. Worst case is that they will want it cleared right away, in total. Failure to do this could put a default on your husbands's credit files, depending on how the bank intend to deal with the debt.

In a joint loan, for instance, the lender generally allows the solvent borrower to simply take the loan on and pay as already agreed with no repercussions. An overdraft, however, is a different animal, under different terms and it will depend on the bank's terms and policies as to how they proceed. I am afraid I can only guess.

[LB22]

Thanks again Foggy! Really appreciate your time. My head is all over the place at the moment...I have so many questions

[luluj]

Please ask your questions - we all understand as we have been where you are now.

[LB22]

Thank you! Does the IVA only affect the banks etc. You have listed in hour IVA or is it everything associated with your name?

[Foggy]

Thank you! Does the IVA only affect the banks etc. You have listed in hour IVA or is it everything associated with your name?

It basically destroys your credit rating for at least 6 years -- but that is recoverable.

[LB22]

Thanks Foggy.

What I meant to convey was say if I listed Santander on my IVA and I have a metro bank account. Would metro bank be informed of my IVA and would it affect that bank acc?

I’m hoping that when this is all over I will be able to remortgage and even borrow more for an extension that we have always needed but haven’t been able to afford

[Foggy]

Metro Bank should not be automatically informed if they are not a creditor, however, they could still 'discover' the IVA through the Insolvency Register or further credit checks. You will not be allowd any overdraft faciities on bank accounts.

Recovery, remortgaging etc. is perfectly feasible after an IVA, once the dust settles. Have a read here:
https://www.iva.co.uk/what-does-an-iva- ... dit-record

[LB22]

Hi

I’m looking for some advice please. I receive the outcome of my IVA tomorrow. In the meantime Lloyd’s Bank have removed my current account and our joint account into the collections team.

I phoned them today as this was done before speaking with us. My husband is now liable for the £3000 overdraft we had. She has said ghat a default has been put on his account and will last on his credit file for 6 years...can this be right? He needs to have conversation with him about paying the money back.

I thought a default was when you are missing payments. Overdrafts are not regular payments as such as there is no set amount to pay back each month.

So how can he have a default on an overdraft? Please help as I need to call them with my husband to discuss. I would like to know where I stand and what position we can rightly claim.

Thanks!

[Foggy]

They are taking the view that the overdraft account is a joint account and that it has been defaulted by you ( which is true - by taking out an IVA you have publicly declared your inability to pay the overdraft back). As a joint liability it now, correctly , falls to your husband to service.

I would argue with the bank that it is the account in default, not your husband and that it is not right that he should have a default against his name, when he has not, yet, defaulted.

This might be a hopeless arguement because I would imagine, under the banks standard terms, they are able to call for immediate payment, in full, on defaulted accounts and, I assume, are working on the assumption that this will not be possible.

Yes, a default will show for 6 years.

[LB22]

Thank you Foggy, this is exactly the scenario I didn’t want to happen. My IVA practitioner said to me yay this wouldn’t happen

He will pay the balance off in full. Does this
mean that his credit rating will now also be bad for 6 year’s?

Is there anyone higher I can go to rather than the collections team to argue this case with?

Thanks!!

[kallis3]

You can ask to speak to your IP.

[Foggy]

Thank you Foggy, this is exactly the scenario I didn’t want to happen. My IVA practitioner said to me yay this wouldn’t happen

He will pay the balance off in full. Does this
mean that his credit rating will now also be bad for 6 year’s?

Is there anyone higher I can go to rather than the collections team to argue this case with?

Thanks!!

To be fair to your IP, this isn't the usual scenario. Banks and lenders are usually more sympathetic. They may still agree to remove the default.