Will my Partner be affected if I go Bankrupt

How is your Partner affected if you go Bankrupt Your Partner is not responsible for your debts if you go bankrupt. However they may be affected in other ways.

  • Does your Partner have to pay your debt?
  • Will your Partner’s Credit Rating be affected?
  • How will a jointly owned property be affected?
  • Can you keep your joint bank account?

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Does your Partner have to pay your Debt if you go Bankrupt?

Your partner is not liable to pay your debts even if you go bankrupt. A third party cannot be forced to pay debt that you cannot or will not repay. This is the case even if you are married.

Nevertheless you will have to provide information about your partner’s income. This is so the Official Receiver (OR) can make sure sure they are paying a fair share of the household expenses.

The OR will take this into account when considering how much of your income should go towards the expenses and how much you can afford to pay towards your debts.

If you have joint debts your partner remains liable for the full balance of these. If they cannot afford the payments from their income they may also need to consider a debt solution.

Will your Partner’s Credit Rating be affected if you go Bankrupt?

When you go bankrupt your credit rating is negatively affected. However this does not happen to your partner or anyone else who lives with you. The record of your bankruptcy does not appear on their credit file.

Given you and your partner are living at the same address it is possible that information from your file could be mistakenly mixed up with their’s. It is important they check this by getting a copy of their credit file.

If any of your information does appear they can ask to be disassociated from it. This will then overcome any subsequent credit problems.

Your partner’s credit rating is only at risk if you have joint debts which they cannot pay. Any missed payments will also be recorded on their credit file. This will negatively affect their credit rating.

How will a jointly owned Property be affected?

If you own a property in joint names your share of any equity will be transferred to the OR. However your partner’s share does not have to be handed over. It is not at risk and remains their’s at all times.

Your share of any equity will have to be released. One option is for your partner to raise the funds required. They may have savings of their own or you might choose to re-mortgage the property to achieve this.

If there is considerable equity and you or your partner simply cannot release it the OR might issue a charge for the value of your share. In extreme cases they can force the sale of the property.

If the property is force sold your partner’s share of any equity released will always be given to them. They can spend this money on whatever they like. However they are unlikely to be able to stop the sale.

Can you keep a Joint Bank Account if you go Bankrupt?

After you go bankrupt any account you have been using will normally be frozen by the bank. The OR can take control of any money in it over and above what you need for reasonable living expenses.

If you have any joint accounts the best way of protecting these is to take your name off before you go bankrupt. This should be a simple process if the account is in credit.

If your joint account is overdraw this debt will be included in your bankruptcy. However because it is in joint names with your partner they will still be liable to repay the overdraft in full.

You are allowed to have a bank account in your own name once you are bankrupt. Normally it is best to open a new account before going through the process. There are a number of basic accounts that you can choose from.

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8 thoughts on “Will my Partner be affected if I go Bankrupt

  1. Mark Jenkin says:

    I am thinking of applying for bankruptcy. If in the future I move in with a partner and share the cost of their mortgage and bills, will this be seen as beneficial interest whilst I am on my IPA ?

    1. Hi Mark,

      If you move in to your partner’s property after you go bankrupt then you have abslutely nothing to worry about. You bankruptcy is only concerned with interest you might have in a property by the date you go bankrupt. Remember bankruptcy only lasts 12 months. As such if you subsequently move to your partner’s place and start sharing the mortgage and bills you will not have time to build up any interest in the property by the time you are discharged.

  2. Paul says:

    Hi, Going Bankrupt seems to be the only serious option I have, giving me the chance to get on top of things once and for all, feel like I can breath again, take the stress and worry away from my family and allow me to start again and move on with life. I have not done it yet as I am worried about the effects on my wife’s standing and her salary. We rent our home and my salary covers all of our living expenses; – Rent, Utility Bills etc- all in my name. My wife’s salary covers the costs involved with our vehicles; – HP on her car, our daughters car and my car- all in her name. Between us we then pay for our day to day living costs such as food etc. Currently we have very little disposable income. My concern is whether the OR will have issues in the way we pay our bills currently and what effect going bankrupt will have on my wife? I must admit, whilst I appreciate bankruptcy seems to be the only sensible option it scares me to death! Thank you in advance for any help and advice.

    1. Hi Paul,

      Rest assured the OR is not interested in the mechanics of who pays what. They are simply interested to understand whether your overall household living expenses are reasonable and what if any disposable income you have. They will calculate this by considering the total household income and total houshold living expenses. If after the total expenses are deducted from the total income there is a surplus they will split this between you and your wife pro rata based on the contribution to the total income you both make. You would only ever have to pay your share towards your debts.

      If you would like further advice or help or assistance with the bankruptcy process please do not hesitate to contact me at Beat My Debt (Tel: 0800 077 6180).

  3. Danielle says:

    Hello, my partner went bankrupt a few years ago and at the time we needed to set up an account for him when his closed as he gets paid weekly. But because the closed his new account he couldn’t open another one straight away so I opened another account in my name and it is a joint one that he uses. Now I’m worried that I won’t be aloud credit. My clear score is on good ground but I see that on my report that both bank accounts are linked to this. Will the bankruptcy show up against me because we have a joint account?

    1. Hi Danielle

      The record of your partner’s bankruptcy should never show on your credit file. However if you have a bank account in joint names particularly if it has a credit facility such as an overdraft your partner may then be listed on your credit file as a “Financial Associate”. If this is the case when you apply for credit and give the lender permission to check your credit report they can also look at information on your Partner’s credit file. In theory this could negatively affect your application.

      As such the first thing I would do is check your credit file and find out if your partner is listed as an Associate. If they are my suggestion would be that you that your partner opens a new bank account in his name only and uses this from now on. You can then take his name off your account. After you have done this you will need to contact the main credit reference agencies (Equifax, Call Credit and Credit Fix) and tell them that the association with your paertner no longer applies and ask them to remove it.

      Note: If your partner went bankrupt less than 6 years ago his credit rating will still be poor. As such he will need to apply for a basic account. Many banks offer these accounts. They are free and come with a debit card and internet banking. You can fnd out more about this here: Can I have a Bank Account if I go Bankrupt.

  4. Clare says:

    Hi there,

    I am coming to the end of my year of bankruptcy. My partner and I have been on benefits and my wage has been less than £200 per month so I was told by the OR no need to declare unless it reaches that amount. If my partner begins to earn and we come off benefits will I have to make payments out of my share of tax credits and my wage of around £70 a month?

    1. Hi Clare

      If you are bankrupt you only ever have to make payments towards your debts if you personally have a surplus income. Given your income is made up of tax credits and your wage is only £70/mth I think there is very little chance of this as the OR has already established. As such you are not required to make any ongoing payments towards your debts. This situation could only change if your personal income increases. As the OR has told you there is no need to speak to them unless your income personally rises above £200 a month.

      If your partners income increases this is nothing to do with your income. As such you do not have to tell the OR about it.

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