Your Partner is not responsible for your debts if you go bankrupt. However they may be affected in other ways.
Jump to article contents:
- 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.
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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Hi,
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.
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.
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?
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.
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.
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.