As a debt collection agency we get asked this question a lot, and generally speaking, no, you are not liable for any debt that your spouse has run up.
However, this doesn’t mean you aren’t affected in other ways.
When a debt is taken out in just one person’s name, only that person and that person alone is responsible for the debt. No one, not even collection agencies, should convince you otherwise simply to receive some form of payment.
How you and your partner manage your finances, money, and large purchases that require taking out credit is unique to you.
At Direct Route, we advise you to talk openly and honestly about all financial matters, and if one partner has debts, understanding more about these and how payments are being made can be vital.
Spouse debt liability
Whether you manage your finances separately or together, with joint and individual bank accounts is entirely up to you and your partner. It should be a discussion around what you are both most comfortable with and what works best for your situation.
It’s important to remember money affects all relationships, and at times it can be extremely challenging and a significant strain on people’s emotions.
Separated or together, it is always a good idea to have an understanding of how your spouse’s debts can and, in some cases, will affect you.
Am I liable for my partner’s debt, UK?
There are different types of debt, and each one affects couples and individuals differently.
Personal debt – when a debt is solely in your partner’s name, this debt is their responsibility and theirs only. This means they are responsible for keeping up with repayments and dealing with a debt recovery agency if the debt goes beyond due.
It’s important to note that debt collection agencies cannot contact you for someone else’s debt, even if you are married to them. No information can be passed over, and you cannot be asked for payment or money to clear the debt.
It is also good to be aware that if debts are not secured, for example, against your home, then you won’t run the risk of losing your property.
Yes, you may still receive collection letters through the door, but all defaults will be recorded on your spouse’s credit record – your credit file will remain untouched.
If you’re separated from your partner, it’s important that you don’t throw any correspondence away but rather return back to the original sender.
You may also have, if overdue debts reach a certain point, bailiffs or collection agents knocking on your door; however, because the debt is not yours, nothing that belongs to you personally can be removed from the home.
Joint debts – co-signing a debt, such as a mortgage or even hire car agreement, etc., means that both you and your partner are financially responsible for the repayments – even if you decide to separate.
Joint debts mean you are equally responsible, and creditors and collection agencies can chase you for payment, no matter your agreement with your partner. It does not solely focus on your wife paying your debt or yourself.
(Note: The only discrepancy to this is if a separate agreement has been made and validated through the courts, where proof can be provided.)
Am I responsible for my spouse’s debt, UK?
Ultimately no; however, there are instances where you may be affected.
As we mentioned above, if you take out a joint debt on the basis that your partner was going to make the repayments, and now these repayments have stopped, the debt will quickly become overdue.
In these instances, creditors can apply for access to take control over jointly held assets.
This means if you have a joint bank account or property that you jointly own, you run the risk of these assets being handed over to the creditor as repayment of the debt – regardless of the situation and what was originally agreed between you and your partner.
(These are exceptional circumstances and do vary on a case-by-case basis).
Are you liable for your spouse’s debts, UK?
Before jumping straight into joint purchases and accounts, knowing your partner’s financial status is always a good idea.
For example, if you or your partner are struggling with debts, do you have the capability to carry more of the financial burden? Are you prepared for the additional pressure and strain this can put on the relationship?
Or have you considered the consequences if your partner can’t get credit due to poor credit scores/ratings, so you are asked to take on the debts in your name, taking a big risk if things go wrong – can you afford to pay these debts back on your own?
Direct Route is a team of professional collectors providing a range of debt collection services and information.
To see how we can help further and to find out more check out our website today.