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?
Rather speak to someone? Call 0800 077 6180 or fill in the form below and we’ll call you free now?
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.
Arrange a call with a Bankruptcy Expert
Privacy Policy
Your information will be held in strictest confidence and used to contact you by our internal team only. We will never share your details with any third party without your permission.
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?
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.
Hi Sir
I have £30000 unsecured debt. I am a self employed receiving working tax credit. The house is on my wife’S name but she doesn’t work. My question is what will happen to house if I go bankrupt?
Thanks in advance
Hi Charlie
Whether or not your wife’s house will be affected if you go Bankrupt will depend on whether you have any financial interest in it. Even though it is in her name the Official Receiver can argue you have an interest in it if you helped pay the original deposit, paid for any significant home improvements (such as a conservatory) or have paid the mortgage on her behalf for any length of time.
In these circumstances the OR is likely to argue that a percentage of any equity in the property is yours. This amount would therefore have to be raised and paid to them if you go bankrupt.
If you have done non of these things and the deposit and and all mortgage payments have always been paid for by her from her income it is unlikely you have built up any financial interest. In that situation the house would be safe.
This can be a complex area. As such before making the decision to go bankrupt I would strongly recommend that you get further advice about the property. Please contact me at Beat My Debt (0800 077 6180) if you would like to chat the situation through.
I’ve just found out that i’m pregnant with my 3rd child. this wasn’t planned, I can’t afford a 3rd child but really don’t want to get an abortion, I don’t believe in them. To have a baby me and my husband could not afford to pay all our loans, credit cards and bills. If I stay at work I can’t afford childcare and if I come out of work I can’t afford our debt. I already went bankrupt and was discharged in 2010…..can I go bankrupt a 2nd time…could we do this as a couple
Hi Heather
From what you have said I feel that bankruptcy may well be a sensible way for you and your husband to deal with your debts. Assuming that neither of you are home owners and you do not own a car worth more than £1000 you would have nothing to lose. If you will not be working you would not have to make any further payments towards your debts and you would be discharged after 1 year.
The fact that you went bankrupt previously does not matter. You can certainly go bankrupt for a 2nd time. It was almost 10 years ago and your situation now is unrelated to what happened before so you would not be penalised. In fact you will not even have to declare that you went bankrupt previously on your application form.
In terms of both of you going bankrupt there is no such thing as a joint bankruptcy. You would need to make separate applications. The downside of this is that you would both have to pay the fee. For this reason you need to consider the total debt in each of your names. If either of you (or both of you) owes less than £20k then that person might qualify for a Debt Relief Order. This would give you the same outcome as bankruptcy but is far cheaper to implement.