Getting into debt is all too easy in the modern world. Just about everyone wants to take your money, and everything seems expensive. Yet bearing the cost with a partner can make things a little easier, as costs are spread, and it can be easier to get credit.
However, this can lead to problems if you end up separating. Many people ask, ‘am I liable for my ex-partner’s debt?’ It’s a complex question with many variables, so we take a look at all of the essential info you need to know.
Debt after separation
Separating from a partner is never easy. Whether it’s a divorce or moving into separate homes, there are many emotional and practical difficulties to overcome. However, it can also make your finances a lot more complicated. If you’re used to splitting bills and other payments with your significant other, the world can seem expensive once you have to pay for everything alone.
If you find yourself struggling financially when you separate, you should prioritise the payments that are essential. For example, your rent, utilities, and Council Tax are the most important, as the consequences for not paying these can be severe. Once these are paid, you can focus on some of the other debts you have.
Am I Liable for my ex-partner’s debt?
This can seem like a complex question. You’re probably used to paying half of everything, which might mean that you think you are liable for your ex-partner’s debt. However, in reality, there are quite a few variables that determine whether or not you need to pay.
For example, some types of debt come with joint liability. So, if you’ve signed up for something in both of your names or acted as a guarantor for your partner, the chances are that you’re liable. However, some types of debt are tied solely to one person. So, even if you were helping to pay it before, you might not need to when you separate.
When you’re asking yourself ‘am I liable for my ex-partner’s debt?’, you should take into account the types of debt they have and whether or not it comes with joint liability.
The term joint liability is a bit misleading. You might think that it means you’re liable for your half of the debt, which is fine. However, in reality, it means that if the other person refuses to pay, you’re liable to repay the entire cost of the debt.
There are a few different types of debt that come with joint liability. Many of these are associated with living together and being in a relationship, for example:
- Mortgage and tenancy agreements that have both of your names on
- Bank accounts and overdrafts set up jointly
- Personal loans in both of your names (that are unsecured)
- Any bills that have both of your names on
- Catalogue debt that was set up together
It’s worth noting that some types of debt might come with liability even if it was in your partner’s name. For example, council tax could come with joint liability if you’ve been living at your partner’s address for some time.
Most debts that are in a single person’s name aren’t shared with their partner (unless they’ve acted as a guarantor). This includes things like credit cards, which are often misunderstood in this respect.
For example, your partner might have added you as an additional cardholder to their credit card. This means that you can use their credit card in the same way they can. However, that doesn’t make you responsible for the debt on the card.
What this means is that, if your partner has a lot of debt on a credit card in their name, you’re not responsible, even if you’re a cardholder. However, conversely, if they’ve accumulated debt as a cardholder, but the account is in your name, you will be liable.
What if we were married?
Another common mistake people make when asking ‘am I liable for my ex-partner’s debt?’ is thinking that marriage automatically means you are responsible for your partner’s debt. Being married to someone doesn’t mean that any debt is jointly shared.
That being said, if you’re going through a divorce, any assets and debts you have might be split between you. Of course, there are chances that when you get married, you will take out joint credit, which can create a financial link on your credit file. So, if you share a bank account, mortgage, or loan, that link will show on your credit report.
Yes, you can break those links after you separate, which can help to keep your credit record healthy. You can create what is known as a Notice of Disassociation, which lets credit agencies know that you’re no longer with your partner. However, when doing so, you’ll need to prove that there is no longer a financial link.
How can I resolve the situation?
If you have debts that you currently share with your ex-partner, it can be complicated to know what the best solution is. Thankfully, there are a few things you can do to try and resolve the situation:
Speak with your ex
The best resolution is always to come to an amicable agreement. An informal solution means that you can divide the debts and let creditors know who is taking responsibility for it. One of you could also agree to set up a standing order as the other one pays off the joint debt.
Speak with creditors
If you ex-partner isn’t playing ball, you might want to speak directly with your creditors over any jointly held debt. If they cannot track down your partner, for example, you’ll be solely liable. However, if you explain the situation, creditors will usually be willing to accommodate your situation.
It’s always best to get ahead of the situation here. You don’t want your debt to be passed to a collection agency, as they tend to be more forceful. If you’re struggling, check out Citizens Advice for further information. You can also read our debt options guide to see some potential solutions.