Can I be Responsible for Someone Else’s Debt?

Can I be Responsible for Someone Else’s Debt?

In normal circumstances you are not responsible for someone else’s debt if they do not pay. This is the case even if you are married.

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Are you Responsible for a Spouse or Partner’s Debt?

In general you cannot be forced to pay someone else’s debt. Legally debts are only owed by the individual who borrowed the money.

As such if your spouse, partner or anyone else you know does not pay a debt they owe you are not liable for it.

This is even the case if you spent the money. For example if you were a second card holder on a credit card. The card company cannot force you to pay if the card account holder does not.

A third party is not normally legally obliged to pay a debt in someone else’s name.

What if your Partner starts a Debt Management Plan?

If your partner is struggling with debt they might consider using a solution such as a Debt Management Plan or IVA. This would allow them to reduce the payments they make each month.

Even where they do this you have no liability for their debt. Once the Plan is in place the creditors have to accept the reduced payments as agreed. They cannot ask you or anyone else to make up the difference.

Some debt solutions will result in part or all of a debt being written off. In particular an IVA or Bankruptcy. In these circumstances the creditors must accept the situation. They cannot turn to you for the balance.

What if you are Joint Homeowners? 

One of the options open to a creditor to try and enforce the payment of a debt is to apply for a charge against a property. If granted the debt in effect becomes secured.

Usually if such a charge is issued it can only attach itself to the share of the property owned by the person who owes the debt. If the house is subsequently sold it can only be paid from their share of the equity released.

The only time your property could be at risk is if the other joint owner goes bankrupt. In these circumstances the official receiver could force sell the property to release their share of the equity if this cannot be raised in any other way.

Both parties are responsible for a joint mortgage. If one cannot or will not pay the other is liable to maintain the payments.

Joint Debt and Personal Guarantees

More than one person is responsible for a joint debt such as a joint overdraft. In these circumstances both named account holders have equal responsibility for 100% of the balance.

As such if one account holder cannot or will not pay the other will be chased for 100% of the money owed. This is the case even if only one of the account holders spent the money.

If you act as a guarantor for somebody’s loan you are then automatically responsible for paying it if they do not.

Where a friend or family member asks you to be a guarantor for their loan you will have to pay the full balance plus interest if they do not.

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6 thoughts on “Can I be Responsible for Someone Else’s Debt?

  1. Andrew says:

    Hi

    Can I pass my debt on to someone else? The thing is I owed talk talk £100 and never got round to paying it… then I got a letter through the door to say they’ve passed it on to someone else…

    Thing is I’m owed money from a bloke so I’ve passed it on to him.. Can I do this like they can?? Many thanks

    1. Hi Andrew

      Any company or individual is quite within their rights to sell on a debt that they are owed. There are a number of debt purchasing companies who buy outstanding debt for a fraction of the money owed. They are then legally allowed to collect on the debt and keep what they get. This situation is in fact quite common and is exactly what Talk Talk seem to have in your case.

      However you cannot pass a debt you owe on to someone else. As discussed in the article above legally no one else can be made responsible for a debt you owe. Even if someone else owes you money you cannot transfer a debt you owe to them. This is not possible and they cannot be forced to pay the debt for you.

      As such the only option is for you to make an arrangement to pay your debt and make alternative arrangements to collect the debt owed to you.

  2. Tanisha Cull says:

    Hi I’m writing on behalf of a relative. She has debt in her name but her husband has put these in her name. He has since died (7year) she is still be chased by these various debt people. Does she legally have to pay even though she has no clue what these are not has she signed anything??

    1. Hi Tanisha

      This is a difficult one. On the face of it as the debts are in your relatives name she is legally responsible for paying them. Has she attempted to speak to the various creditors about this and explain the situation? It may be that there is something that they can do.

      Unfortunately if they stick their heals in I think she will be stuck with having to pay the debt. Having said that we are not solicitors here. If they will not help her then I suggest she gets some legal advice from her local CAB.

  3. Hassan says:

    Hi,
    I have a friend who used my account to rent a car and he totaled the car and the company hired a debt collection agency to collect the debt from me, which is a bit over 15k. The friend is willing to take the debt under his name. Would it be possible to contact the company and transfer the debt to him? I’m only 20 and I’m a full time student with no job.

    1. Hi Hassan

      You should certainly contact the collection agency and see what the options are. However I do not think they will be able to transfer this debt out of your name.

      Having said that if your friend is willing to make the payments there is nothing to stop him doing this on your behalf. He can simply set up a standing order from his account to pay every month. The debt does not have to be in his name for him to do this.

      You can speak to the collection company to agree what the monthly payment should be and go from there.

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