A lot of people worry about the impact that their partner’s debts can have on their own finances.
It’s a sad fact of life that many individuals with debt problems often hide the true extent of their situation from those closest to them, often only admitting how bad their debts are when they are in severe difficulties. Many people worry in this kind of situation that they will also be held liable for these debts, whether they are married, living together or in a civil partnership.
The fact is that you are only liable for debts if they are in your name.
The only exception here is council tax and some household bills where you may be held liable for payment if you lived in a property for a period of time where debts were incurred even if the bill wasn’t in your name. But, in general terms you are only liable for debts that are:
- In your name
- Held jointly in your name and that of another individual or group of people.
If the debts are not listed in your name then they are not viewed as being your debts. But, do be aware that joint credit agreements give you equal and joint liability and creditors can chase one party to recover the overall debt if another one refuses to pay or cannot be contacted. Their main aim is to get one of you to take responsibility.
So, for example, if you are married and take out a joint mortgage with your husband who then runs off with another woman and goes to live in Spain then you are liable for the debt you both signed up to. Or if you have a joint current bank account and your wife runs up your overdraft without your knowledge then you are just as liable for the debt as she is.
This kind of situation can cause a lot of hassle for some people.
Our earlier example showed a wife whose husband had left the country to start a new life leaving her with the mortgage. In this instance her mortgage lender may decide not to chase the husband for the debts owed here as he is out of the country and they would be well within their rights to solely pursue the wife for full repayment.
Other problems that can arise occur when someone with debts moves from their address to a new one without notifying their creditors. They may then send letters, make phone calls or even send debt collectors or bailiffs round to try and get their money back. This can be quite scary for the person they turn to, even if the debts are not in their name.
If this were to happen to you then it is important to remember that you are not at fault here and you are not liable for the money owed. Debt collectors who hassle innocent people caught up in a debt problem can be reported to your local Trading Standards office. In this scenario your best move is to tell any companies chasing debts that they are not in your name. Do not let debt collectors or bailiffs into your home.
And, if possible give them the current address of the person with the debts. You can send them a letter stating that your name is not on any of the debts to do this and to give them formal notification of the forwarding address of the individual that they are actually chasing. They will then stop focusing on you and turn their attentions to the real source of the problem.
If a former partner has had problems with debts in the past then you should also contact credit reference agencies and make sure that their name is no longer linked to yours on your credit record. If it is then you can ask to have the name removed via a Notice Of Disassociation. Bear in mind that you can only do this is you have severed all financial ties with your partner.