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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I am in full time employment as is my husband – I had debts from my previous marriage and have also accrued debts from this one – £30 k approx – I am in a DMP but see no end as it will take 8 years plus to pay off.
I have looked into Bankruptcy but fear that if I do declare they may say that I need to stick with the DMP. It is causing me a lot of stress and my marriage is suffering because of this. We are in rented accommodation.
Do you think it is possible for me to declare myself bankrupt- Thankyou
Hi Karen
I assume that you are worried someone will say you cannot go bankrupt as you are currently making payments towards your debts? This is not the case. You can certainly stop your DMP and then go bankrupt if you want. Your property will not be affected as it is rented and your husband will not be involved.
Having said it is important to understand that you will have to give details of both you and your husband’s income on your application and your total household living expenses. The official receiver will then calculate your total household surplus income.
If there is any your share will have to be paid towards your debts for 3 years. Your husband’s share would be his to keep.
If my ex husband goes bankrupt will I be left with the full amount of any joint debts to pay off on my own?
Hi Kerry
Unfortunately the answer to this is yes. If your ex goes bankrupt and you have joint debts with him you will be personally liable to pay 100% of the balance of these. If you are unable to afford to pay them you may need to consider implementing a debt solution of your own.
I have debts of around £10,000 and haven’t been paying anything on them for about 12 months since my husband found out about the debt and that i had been spending bills money to meet the repayments. The debt stems from a time when i was a housewife and suffering from mental illness.
I started self employed cleaning about 18 months ago to try and get my life back on track. I just work 14 to 16 hours a week while the children are at school so my earnings are quite low.
I have a car but its in my husbands name and my money covers the petrol, running costs and food shopping. My husband pays everything else and the mortgage is in his name. We don’t have any joint finances. If i go bankrupt will it affect him? Will he be able to buy a house again? And can they take the car?
Hi Helen
Because you are married and your husband is a home owner Bankruptcy is not automatically a sensible solution for you. The fact you are married and have children means that even though your name is not on the mortgage in a Court of law you probably do have an interest in the property. As such it could be at risk if you use the bankruptcy solution.
Given this I would strongly advise you consider an alternative solution such as a debt management plan or an IVA. If you can afford to pay £100/mth to cover all your debt an IVA would probably be best. You would have to pay for 5 years and then the remaining debt would be written off.
Your husband would not be affected by an IVA. His credit rating would not be impacted and nor would the house or car.