Managing your money with a partner can be a useful way to control your outgoings and save money. For example, lots of couples set up a joint bank account when they move in together and when the time comes to buy a house, a shared mortgage is normally easier to get approved than a single one.
However, if your relationship breaks down or circumstances change, bills you pay together can become a lot harder to deal with, especially if one person goes back on their word, leaving you with joint debts you have no way of repaying.
What is joint debt?
Joint debts are any debts you incur as a result of entering a financial agreement with another person, for example a shared mortgage.
If one partner doesn’t keep up with their payments during or after a divorce or a separation, the other person may end up having to deal with those debts on their own.
It’s often believed that each person is in charge of just their half of a joint bill, but this simply isn’t the case.
In the UK, when you take out debt with another person, you and that person each become liable for the full amount of the debt, rather than both of you being responsible for half of the full amount.
Let’s say you and your partner take out a joint debt of £1,000, with joint names being listed on the credit agreement. Under UK law, each of you is responsible for the whole debt.
If one or both of you can’t, or won’t, pay, each will legally be responsible for paying £1,000. This is known as joint and several liability.
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Can a joint debt be split?
As previously mentioned, because of the principle of joint and several liability, joint debts cannot be split. If you take on joint debts with another person, you will each be responsible for the whole of the debt, rather than just your share of it.
There are some debts that can be taken out under joint names but aren’t really joint debts, like credit cards.
When you take out a joint credit card with a partner, you may share the same bank account, but the credit agreement is always aimed at a primary cardholder, who is ultimately responsible for repaying.
Unlike credit cards, joint debts cannot be split. Whatever level of debt you have jointly incurred, each party listed in the financial agreement will be liable for the full amount, even if your relationship status or financial circumstances change.
Will my partner's debt affect me?
All debts and bills taken out in your name before you get married will remain your responsibility afterwards, as will be the case if one of you takes out a debt alone after you are married.
Your credit reports will not be merged, but if one of you has poor credit, this may affect the other person’s credit score.
Am I responsible for joint debt with an ex-partner?
Legally speaking, your responsibility for any priority debts you take on with another person will not change just because your personal circumstances do.
If you take on a joint debt with your spouse, like a mortgage for a shared home, creditors will still hold you responsible for paying the debt towards your home, whether you both continue to live in it or not.
That does not change with ex-partners. Because of the principle of joint and several liability, creditors will expect either you or your partner to continuing paying the debt in full.
If your ex-partner refuses to pay, it may be time to seek debt help, because creditors may come after you for the full amount.
What happens to joint debts if my partner is deceased?
If you take on joint debt with a partner and they pass away, that debt is handled slightly differently. If the debt is in the name of the deceased only, it’s not your responsibility to pay it back.
That doesn’t mean your partner’s debt won’t affect you in any way. If you shared a home and there is equity in the property that you and your partner jointly held, companies may attempt to release a portion of that equity to put towards the deceased’s debt.
What happens to joint debts if a family member is deceased?
This situation works in much the same as the death of a partner; if the debts are not in your name, companies cannot ask you for payment.
If you were a guarantor for the debt in question, however, creditors will be able to chase you for the outstanding balance.
What can I do if I didn’t agree to a specific joint debt?
If you’re being chased for debts and you don’t know what they’re for, the first thing to do is ask the company that’s chasing you for the original paperwork.
If you didn’t sign up for a certain debt, it’s possible that you’ve been a victim of credit fraud at the hands of an ex-partner. The first step is to seek debt advice – if you carry the debt jointly, you may technically be responsible for payment, which could harm your finances considerably.
How can I help a partner or family member who is in debt?
Debt is a common problem in the UK, and there’s no reason for people to feel ashamed or embarrassed.
One of the most problematic aspects of debt is that people are often unwilling to talk about it, but actually, debt is a very normal part of life, and no-one should have to face it alone.
If your loved one doesn’t realise how bad their debt problems are, gather all the information you can and do your best to help them understand it.
Once you’ve taken that step, it may be time to seek professional debt advice.
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Where can I get debt advice and find solutions to joint debts?
If you’re struggling to work through your own debt problems, or an ex-partner has ran up debts on your joint bank accounts and it’s threatening your finances, the team of debt professionals at Creditfix are here to support you.
We can talk you through your options for dealing with joint debts, and find you a solution that’s right for your situation. For expert debt advice and help choosing a debt solution that works for you, call Creditfix today. The phone number is 0800 0431 431.