Will my Partner be affected if I go Bankrupt

Will my Partner be affected if I go Bankrupt

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

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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.

This means they are still free to take out new forms of credit in their name. They will pass lender’s credit checks as long as they have no debt problems of their own.

There is a small possibility that information from your file could be mistakenly mixed up with their’s. If they suspect there is a problem they should check their credit file.

Your partner should still be able to get credit while you are bankrupt. Their credit rating is only at risk if you have joint debts which they cannot pay.

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

  1. Deborah says:

    I am 17 month into bankruptcy. I’ve got a boyfriend and were in talks about moving in together he has got a lot of savings would the bankruptcy (A.I.B) take his savings into account and need to pay it. The debt is in my name and my ex partners name due to us splitting up and he continued to live in the house and didn’t pay the mortgage. The mortgage company tracked me down 6 years later.

    1. Hi Deborah

      Given you mention the AiB I assume you are living in Scotland…. Whether in Scotland or England/Wales a third party is not responsible for your debts. If you move in with your boyfriend any savings or assets he owns are not at risk. He would not have to pay these to the AiB

  2. Louise says:

    Hi there,

    My husband is self employed , I don’t work I receive tax credits and child benefits which I greatly depend on for my two children . Between me and my husband we have Debts of just over 20k his debts are around £9000 and our joint debts are £5000 and my debts are around £6000 . He is massively under pressure to pay everything and he is feeling like this is the only route to go down.

    But I don’t want to go bankrupt as I feel like I would loose my tax credits bank accounts etc. The question is if he goes bankrupt alone how will this affect my tax credits bank accounts etc as I said I massively depend on these for my children also would this affect my husband’s self employed job?

    We have just recently moved into my parents home so don’t own our own home car etc.

    1. Hi Louise

      If your husband or indeed both of you go bankrupt you do not need to worry about your bank account. If only your husband goes bankrupt then your bank account will not be affected in any way (he can also have an account – see below). If you decide to go bankrupt as well to deal with your debts then you can also have a bank account. You will be able to use it to continue receiving your tax credits. You don’t need to worry about that.

      The type of bank account you can have when you are bankrupt is called a basic account. Most banks now offer these. If you owe money to your bank and/or if your account is a current account you will have to open a new basic one. It is easy to do because most banks now offer these.

      In terms of your husband’s job this would not be affected. If he goes bankrupt he can continue working as a self employed person with no problem.

      I note that individually your debts are less than £20,000. Given you have no assets I therefore suggest you both consider a Debt Relief Order (DRO) rather than bankruptcy. This gives the same outcome but if you qualify (which it sounds like you would) then the cost of the process is just £90 per person rather than £680 for bankruptcy. This option might be better for you both. The comments above re bank accounts and self employed work also apply for a DRO.

  3. Peter F says:

    Hi, a relative has asked me to look into PPI for his wife.
    He was declared bankrupt 16 years ago, she was not affected.
    He thinks he has/had no PPI and any claim would not be his anyway.
    If (big IF!) she is successful in her PPI claim:
    1. Would she be entitled to it, or would it go to OR?
    2. Could it in any way negatively affect them (i.e. could the OR enforce payment or take any retrospective or current action against him/her/both?)
    They are both very nervous about putting themselves in a negative situation as they have managed to get themselves into a good place in the last few years!
    Thanks in advance

    1. Hi Peter F

      If the wife of your relative had debts in her name that were not included in her husband’s Bankruptcy then she can claim for PPI against these. If she is awarded compensation it will be 100% hers to keep.

      If you are talking about joint debts which were included in the bankruptcy then again she could still claim. However of course only 50% of any compensation would be paid to her. The other 50% would have to go to the Official Receiver.

      If she gets a windfall like this (or any other windfall for example an inheritance payment) it will not negatively affect them in any way. The official Receiver has no right to, or claim upon, any windfalls that a non bankrupt receives whether they are married to a bankrupt person or not.

      By the way if he is now discharged and receives a windfall which is not a result of something that happened before he went bankrupt or while he was bankrupt it would also be his to keep.

  4. Mark says:

    Hi, my wife has her own company which I have nothing to do with and is on the brink of bankruptcy. I have my own job and we have no joint debts and we rent a house. What impact would my wife’s bankruptcy have on me financially? I have PCP agreements and a loan but having read some of your comments, would I be right in thinking I would most likely be worse off as a result because my income would need to be declared and the OR can have a slice of my wages leaving me less money to cover my own bills?

    1. Hi Mark

      If your wife goes bankrupt this should have no impact on you whatsoever. You can continue paying your car finance agreement and loan. Your credit rating will not be affected.

      The only thing to be aware of as you say is the income and expenses calculation. The OR will need to do a household income and expenses budget. This will need to include the total household income and expenses. The household surplus is then split based on the proportion of the income you both generate. This process ensures both parties are contributing their fair share towards the household living expenses.

      A problem can occur if the party who is going bankrupt has been subsidising the other’s debt payments. This is not allowed to carry on if they go bankrupt and can leave the non bankrupt party with debts they cannot afford. However in your situation this would seem unlikely. If your wife’s business is going to stop and she has no income then the OR cannot take anything from her. They are not allowed to ask you to pay towards her debt.

  5. Ali says:

    Hi James. I have received a demand of £40k from MIB, only £3k of which is the personal injury element, £4k legal fees and the rest they are yet to explain. Will declaring bankrupcy help me wipe the debt? (I’m aware personal injury payments are exempt)

    Will my two children’s ISA accounts and wife’s bank account remain unaffected? Me and my wife do not own any assets or have joint accounts. She does not work and have any income.

    1. Hi Ali

      By MIB I assume you mean the Motor Insurer’s Bureau? As far as I am aware this demand can be included in bankruptcy. As a result it would be written off yes.

      If you go down this route you do not need to worry about money in your children’s ISAs. This is their asset and not yours and is not at risk. The same goes for your wife and her bank account. Her account would not be affected and she could continue using it.

  6. Brett says:

    HI, I am separated from my Wife and have 2 children that live with her. She is bankrupt and has an IPA. I still pay most of the bills and give her around 150 p/m towards the kids. We are considering getting back together with me moving back in, my main worry is that although she works and takes home around £320 per month plus Child benefit of £140ish per month.

    I take home around £3200 with personal debt outgoing of £270 a month, how would I be affected? Would she be responsible for a portion of household bills etc even if they were in my name? The main reason for the split was her debt and financial irresponsibility. I also have a good amount of savings. I don’t want to fall into a financial rabbit hole again.

    Many thanks

    1. Hi Brett

      You moving back in with your wife would not affect her IPA in any way. In fact she would not need to inform the official receiver at all. She only needs to contact them if her personal income goes up. Given her personal income will remain unaffected she does not need to inform them.

      Equally non of your savings will be at risk.

  7. Elle says:

    I am looking to go Bankrupt shortly. I have around 30000 in debt and 10000 self employed tax debt – with some saved for this but not due until jan 2020.

    I have recently found I’m pregnant and will become insolvent when I go on maternity leave as I won’t be able to cover my payments. I am worried I will receive BROs for not setting enough aside for tax. I’ve made some preferences to paying off creditors – however these have then been respent so all currently stand the same – does this still count as preference?

    Also the joint account I have with my husband is a horrible mess, we both have big salaries paying in way over our bills (not including debts) I put in more money than him for bills and he often takes money in and out and sends money to his mum and dad and everywhere. This often means it eats into money I have put in. Will this effect me in terms of giving money to family and friends?

    Sorry for the long message and hope it makes sense! Any advice appreciated

    1. Hi Elle

      I think your concerns regarding bankruptcy are unfounded. One of the reasons the Official Receiver might consider a BRO is if you owe significant HMRC debt. However it is by no means guaranteed. I think a BRU in your case is unlikely as you had planned to pay the tax you owe but the fact you have become pregnant has meant this may non longer be possible.

      That said if you were to get a BRU it is highly unlikely to make much of a difference to you.

      In terms of your joint account do not worry about being accused of giving money to friends and family. You have not made preferential payments towards debt that you owe so there is no real issue. If you are considering this route I would advise that you take your name off this joint account and open a basic account in your own name and start using this from now on. This will separate your income from your husband’s and ensure you are more in control.

      If you would like to discuss your situation in more detail please don’t hesitate to contact me (0800 077 6180).

  8. PC says:


    i currently have £39,000 of unsecured debt, some of which due to my struggling emotionally to cope around the time of my mother being diagnosed as terminally ill and her subsequent passing. As a result on line gambling spiralled out of control and was part funded by my credit cards . Would the OR automatically place me on BRU/BRO because of this or would the circumstances be taken in to account. I’ve since gone through GamStop to have my email and details barred by all online sites and received bereavement counselling.

    My partner of 18 months has recently moved in with her son to trial living together but is concerned that i will be subjected to long term bankruptcy or IVA and is concerned how that will effect any joint financial commitments in future as she has a good credit rating.

    My monthly debt payments are £800+ and i’ve currently only got around £150 expendable income after outgoings.

    1. Hi PC

      If you go bankrupt the Official Receiver does not automatically issue a BRU. They will consider the circumstances and decide if it is appropriate. Gambling debt is one of the things that could trigger it but it is by no means certain. Your specific situation regarding your Mother will be taken into account.

      Remember even if you do get a BRU it is unlikely to have much effect on you. Primarily it will extend the period during which you cannot be a company director. Also the period during which you cannot borrow more then £500 without declaring you have a BRU. However your credit rating will let most lenders know this anyway.

      In regards to your partner if she moves in with you neither she or her credit rating will be affected in any way so there is no need to worry about that.

      If you want help deciding whether to chose and IVA or go bankrupt don’t hesitate to contact me (0800 077 6180). I am always happy to give advice.

  9. Claire says:

    If i file for bankruptcy during to credit cards debts and my husband was a family card or supplementary card to my credit card will it affect him?

    1. Hi Claire

      If you authorised your husband to have an additional card on your account (which is common practice) and then you go bankrupt he will not be affected. Legally he is not liable for the balance he spent on the account. As the primary account holder you are solely liable.

  10. Elaine Nailard says:

    Hi there. I have approx. 16k in debts and am seriously considering bankruptcy. I am unable to work more hours due to ill health and the HP for the vehicles I owe for, I am struggling to pay. My husband is on long term sick.

    We have a basic joint bank account already. Do I still need to make a separate bank account for myself? Both my wages and my husbands sick pay go into the same account so we can pay for our household bills. How would I do this please?

    I went through a debt relief a good few years ago, but my husband is happy to pay the bankruptcy fee from when he gets pensioned off from work, just so we can get onto a `level playing field` as such. Any advise would be greatly appreciated.

    1. Hi Elaine

      From what you have said I assume you are not a home owner and have a low income so Bankruptcy would be a sensible option for you to consider.

      If the bank account you have with your husband is already a basic one I would think that it will remain open after you go bankrupt. I suggest you speak to the bank. Be honest and explain that you are planning to go bankrupt and check whether the account will be OK or not. If you want to be absolutely sure you can open a separate basic account in your name and take your name off the joint one so your husband can continue to use that.

      You mention that you have a vehicle on HP. Before you go bankrupt it is very important that you speak to the finance company and check with them that they will be OK for you to continue paying for the vehicle. Some finance companies will say you have broken the terms of the agreement if you go bankrupt and demand the return of the vehicle. Others will be more reasonable so you need to check before submitting your application.

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