If you are insolvent and are considering entering into an Individual Voluntary Arrangement (IVA) you may be concerned that your partner, who may be unaware of your financial difficulties, will learn of your difficulties.
Your concern may be as a result of a variety of factors, not least your own personal embarrassment. While it may be difficult to keep your IVA a secret from your partner, it can be done. However, there are a few tricky hurdles to overcome and you should always consider the possible negative effects on your relationship, should your partner subsequently and perhaps inadvertently discover your predicament. Will he or she be happy that you have been less than transparent about your finances? Will you suffer a loss of trust in each other? Is it worth it to hide the truth? Assuming you are intent on keeping it a secret, let’s look at some of the hurdles, starting with your creditors.
Creditors normally like to see a proposal for an IVA outlining all of the household circumstances which contributed to a debtor’s insolvency. They also like to see verification of the total family income to ensure that the household expenditure is fairly shared between both partners – usually in the same ratio as their earnings. This can be tricky to provide if you cannot confide in your co-habiting partner in regard to your financial difficulties or are reluctant to do so. Your creditors are not entitled to see your partner’s pay-slips without his or her permission, for example. If you and your partner jointly own assets, such as the family home or if you have joint liabilities, such as an overdrawn joint current account, these factors make it more difficult to keep your partner from learning of your IVA. There are other such practical difficulties.
There are, however, some obvious scenarios where entering an IVA without the knowledge of your co-habiting partner would be possible and even desirable and your creditors would be sympathetic to such an approach. One such circumstance could be where your partner is seriously ill or disabled and would suffer unduly from the stress of learning of your financial difficulties. Such illness or disability could be mental as well as physical. Another circumstance could be where there is a serious risk that your partner might react violently towards you or your children on learning of your financial difficulties and insolvency.
You might have to satisfy your creditors as to the bona fides of such circumstances and be able to show that your partner did not benefit significantly from the spending which led to your insolvency. If you find yourself in circumstances such as in the examples outlined above, a good initial course of action is to consult with a reputable Insolvency Practitioner, otherwise known as an IP. Your circumstances will be treated confidentially and your IP will be able to advise you not just on the merits of an IVA but also on all of the other options available. Your partner will not be informed of your actions without your express consent.