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Tackling your debts

Coping with joint debt once you’ve split up

Posted 29 July 2014 by Kyri Levendi

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Do you know what would happen to the debts you share with your partner if the two of you split up? Our guide shines some light on the situation.

Breaking up with your partner can be one of the hardest things you’ll ever go through in your life. What makes it even more difficult is if you have debts that are in both of your names. Just how do you go about splitting these, and why is it important that you do?

Read on to learn more.

Joint debts

A survey* recently carried out for us revealed that, of the nearly one in 10 people who split with their spouse or partner in the last 12 months, more than a fifth have credit cards or loans in both their names. So, what happens when they split up?

Unfortunately, just because you have parted ways, it doesn’t mean your responsibilities for maintaining your credit agreement have also separated. In fact, if you have a loan in both your names, you are both responsible for it … regardless of whether you are still together.

Should your ex stop contributing to the repayments, either because they can’t afford to or they just don’t want to pay, it does not mean you are only responsible for paying your half. In fact, you are both responsible for ALL of the debt … if one of you stops paying, the other is liable for the full amount.

The situation is a little different if you share a credit card. In this case, if you took out a card and then made your ex an additional cardholder so that they could have their own card, only you are responsible for the repayments … on both cards.

 

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The loveless nest

A third of the former couples who took part in the survey shared a mortgage. Again, this is something both ex partners are responsible for, so it’s important to sit down and have a conversation about what will happen to your home.

One of you might decide to move out and sell your half of the property to the other. However, if neither of you are able to keep up with the mortgage payments on your own, you may have to consider selling your home to pay off the mortgage, and then splitting the proceeds between you.

You can also let your mortgage provider know the situation, as they may be able to offer you a payment holiday while you sort out what you’ll do next. However, if you simply ignore the situation and stop making your mortgage repayments, not only could your credit rating be damaged, but you may also risk having your home repossessed.

Talk to someone

Going through a break-up is tough, and sometimes having to separate your financial assets from your ex’s can feel like the straw that broke the camel’s back. You may just want to ignore the whole situation and hope it will resolve itself.

However, it’s important you take action as soon as you can to separate any financial commitments you share with your former partner. If one or both of you don’t keep up with the agreement or take steps to have it officially separated, it could harm your current finances and your future ones.

If you’re not sure what to do, there is help available. Read our Debt & Divorce Action Plan for more information on how your joint finances are affected when you split up. If you’re struggling with unsecured debt as a result of a break-up, you can speak to one of our expert debt advisors, who can offer you help and support along with information on debt solutions that might be suitable for your needs.

*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 6th June and 16th June 2014, of whom 500 were Scottish residents.

by Kyri Levendi

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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.