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.
Jump to article contents:
- Are you responsible for a spouse or partner’s debt?
- What if they start a debt management plan?
- The impact on joint homeowners
- Joint debt and personal guarantees
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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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Hi, so about a year ago I helped a friend out with paying off his debt, I am currently paying through direct debit. Am I safe to do so. For example will I have people come to my address to seize assets for the outstanding payment because I’m currently paying it off?
Hi Matt
If you are simply helping a friend to pay their debt you have nothing to worry about. The fact that you are making the payments on their behalf from your bank account does not mean that you have somehow become personally liable.
If you were to stop paying for any reason the creditor will have to chase your friend for the balance. There is no way they could try and chase you or take any enforcement action against you.
My sister is doing an IVA debt management and one of her accounts was with Argos a catalogue company to which I ordered an item but now under her IVA payment plan. My question is am I responsible and held to pay for my item. Its her account and she has many creditors. I’m confused
Hi Michelle
If you ordered an item from Argos using your sister’s account then legally she is liable to pay for this not you. It is the named account holder who is liable for the expenditure on an account. As such the debt you incurred on her account is included in her IVA and you do not have to pay it.
Now if you want to help your sister out financially you can repay to her the money you technically owe for the item you ordered. However that is a private matter between you and her.
Hi. My partner has been in-prisoned and has outstanding debt. Can I start an IVA in his name and sort it all out for him, or will he need to speak with someone to arrange it all?
Hi Leanne
In theory it is possible for someone to start an IVA if they are in prison. You can speak to us us here at Beat My Debt on his behalf to arrange this. However there are some things you need to be aware of given the process that has to be undertaken to start an IVA.
Firstly unless you have a legal power of attorney you cannot sign the necessary documents for your partner. He would need to sign himself. If he has access to e-mail this could be done electronically. Alternatively you would need to take the necessary documents in to him to get his signature.
Secondly you would need to think about how the payments into his IVA would be funded given he currently has no income. A third party such as yourself would have to commit to paying these on his behalf. If you plan to do this you would need to prove that you have sufficient income yourself to maintain the payments. If you start but then cannot afford to continue the IVA would fail.
If you are concerned about funding monthly payments then an alternative option to consider would be a full and final settlement IVA. This is where just one single lump sum payment is required rather than payments each month.