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 could you advise me please I am in debt to local council arranged to pay a lump sum thinking lodgers rent would cover it and he gives me notice – and same day I find out I am at risk of redundancy from a job I’ve been in 6 months – if my friend guarantees a loan for me can he be chased for any other debt I have ?
Hi Helen
If someone guarantees a loan for you their liability starts and stops with that loan only. If you do not pay the loan they are legally obliged to pay it. However they have no liability for any of your other debts.
One word of caution, if you are considering taking a guarantor loan how will you pay it if you lose your job. I recommend you let your friend know that this could be a risk before they guarantee the loan for you.
My friend used to live in my house however he has moved out. A letter has arrived for him saying they are going ” taking control” of goods but he has no goods in the house. Can they still take goods?
Hi Alex
You have nothing to fear. If the person who owes this money has now moved out of your property no further collection activities can be directed at you or the property. I advise you to contact the creditor who sent the letter and confirm to them that this person no longer lives in the property. You can give them a forwarding address if you have one. If you don’t or do not want to get involved you simply say you do not know where he is now.
This should do it and you should stop receiving correspondence at your address. If they persist you can then threaten to escalate a complaint to the FCA (financial conduct authority) but it is unlikely you will need to do this.
Hi
I have accumulated too much debt under my mums name for years and now I am in way over my head and I cannot afford it. She let me use her catalogues (very) etc years ago and now the debt has mounted up.
I have a few other in her name which I have paid for years, out of my bank account but now I simply cannot afford it, along with a loan which she took out for me. This comes out of her account and I transfer her the money each month. She doesn’t know I am struggling. She also gave me a credit card as well which I no longer can afford.
I know there is no way she would be able to keep up these payments if I can’t pay them. Is there anyway I can get help with this?
Hi Nikki
Because all the debts are in your Mum’s name it means that legally you are not responsible for paying them, your Mum is. What is more the creditors will not even speak to you about reducing payments. They will only speak to your Mum.
There are ways this can be dealt with. However first of all you will have to speak to your Mum about it and explain you can no longer afford the payments. Once she knows the issue you can assist her with starting some form of debt management solution in her name which you pay for. One of the easiest ways to do this would be for her to start a Debt Management Plan which you pay.
If you need more help or advice with this please don’t hesitate to give us a call (0800 077 6180). Its confidential and there is no obligation.