Marriage and debt responsibility during an IVA

When looking forward to a wedding it is advisable that you and your future spouse are transparent regarding each other’s financial position. Understanding one another on incomes, debts, assets and financial goals enhances successful marriage.

If you are planning for marriage, you must have the money to sustain the new joint with your partner. If you don’t have the money and then do not sign a prenuptial agreement, you would accede to each other’s debt.

Signing a prenuptial contract is highly recommended for the reason that people are bound to change and can leave you in severe debt in case of a separation or divorce.

Marriage an IVA

Partners who plan to marry while on IVA may have to make Interlocking IVA proposals as individuals to their Creditors. Interlocking IVA proposals are typically best for you as lower administrative costs are involved.

In case of Divorce

It is important to know that lenders are by no means bound by a divorce agreement, thus no matter whomever files for divorce both of you remain responsible in payment of the debt. By law a Creditor cannot close a joint account because of a change in marital status, but can do so upon a request from the spouse.

In circumstances where you have a mortgage or a home equity loan, Creditors would require you to refinance the credit as a way of removing your spouse from the obligation. Planning ahead your financial future is the only way to meet your debt challenges in a marriage or divorce.

Ideally, you should pay off as many joint debts as possible before the divorce is finalized. This makes settlement negotiations easier and helps you to start a new financial life wherever you go.

Especially if you own a property are not an easy topic and should be evaluated carefully. We advise you to consult a specialist in law and debt management if you have specific questions.

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