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Tackling your debts

Are you still financially linked to your ex?

Posted 01 October 2016 by Christine Walsh

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Millions of people are financially linked to their ex. Find out what this means, and what to do if you’re in this situation.

Are your finances still tying you to your ex? If they are, you certainly aren’t alone. Research carried out for Debt Advisory Centre show there are 2 million Brits still financially linked to an ex that they broke up with within the last year. This can be a tricky situation to be in, especially if things didn’t end on the best of terms. 

Let’s have a look at the type of financial associations exes still have, and how to deal with the situation if it’s affecting you. 

 

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What does the research show?

Of the people questioned in the research, 3 million of them had split up with a partner in the last year. Of those people, over a third had a joint mortgage and just under a third still had a joint tenancy agreement. 

Some of these splits resulted in housing issues for the people involved. 73% of people said that one partner had to find a new place to live. 23% said both people had to find somewhere new to live. A few people – 4% - had to stay living with their ex. This might be because they found it difficult to find a new place to live, or because they are already paying towards a joint mortgage and it would be too expensive to pay rent on a new place as well. 

With over two-thirds of people still linked to their ex it seems that, in some cases, it can be easier to break emotional ties than it is to break financial ones. 

The financial challenges of a split

There a few a financial dangers that you need to be aware of if you’re splitting up. One partner may move out and stop paying towards a joint property and bills without their former partner’s knowledge, meaning they fall behind on these important payments. 

When it comes to joint loans, both people are joint and severally liable for the debt. This means that both partners can be chased for the whole amount that they borrowed, not just half. This can cause problems for one partner if the other decides to stop paying towards the loan

When it comes to credit card debt, there is only ever one person that owes the debt and that is the person in whose name is on the account. Complications can arise when there is a second cardholder on the account. 

The second cardholder is allowed to use the credit, but is not actually legally responsible for paying any of it back. In some cases, people may have allowed their partner to use their credit card on the understanding that they would help pay the money back. But, as the second cardholder doesn’t have to pay any of the money back, the person whose name is on the account may find themselves saddled with all the debt after a split. 

When you take out a joint account, your credit histories become linked. This can cause you problems if your ex then misses payments, pays late or pays in part. If a lender or service provider checks your credit file and sees this, is could potentially stop you from being able to borrow, or mean that you don’t qualify for the best rates of interest. 

Communication is key

When you’re dealing with the breakup of a serious relationship, it’s bound to be an emotional and stressful time. Thinking about finances may be the last thing you want to do, however, it’s very important that both you and your ex understand how you’re going to pay your joint debts back. 

By coming to an agreement and putting some rules in place, you should both find that you avoid some of the challenges we’ve explored and have at least some peace of mind during this difficult time. Our previous blog what happens to my debts when I’m divorcing, should provide some more guidance on how to separate your finances after a split. 

Solving the problem and unlinking yourself from your ex

It’s possible to break the link between you and an ex on your credit file by asking for a notice of disassociation. Just bear in mind that this will only work if you no longer have any joints accounts that are still open with your ex. So if you have a joint loan, you’ll need to pay this off before you can ask for the financial link to be broken. 

It’s important to keep your lenders up to date with what’s happening. They might be able to give you a payment holiday or freeze interest and charges on your debts for a while. This might give you the time you need to sort things out with your ex and decide how you’re going to move forward with your debts.

If you’ve found yourself in a situation where your ex isn’t willing to pay their share towards joint debts and you’re left trying to pay everything, it might be time to get outside help. There are debt solution providers who can tell you about the various solutions available and stop things from escalating. 

You can get in touch with one of our trained advisors using the options below and they will go through your finances in detail with you. They’ll be able to work out how much disposable income you have to put towards your debts each month and which solution, if any, is suitable for you. 

 

*3Gem Research carried out online interviews with a nationally representative sample of 2,000 people between 29th June and 6th July 2016.

**Figures extrapolated from ONS data and research carried out by Landbay

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.