Dealing with debt can be a stressful situation and if you’ve found out your partner has debts, you may be concerned that you’re next in line to cover the cost. There are many common misconceptions about who’s responsible - find out more about how your partner’s debt can affect you and actions you can take.
Generally speaking, a person is only responsible for their own debt. If your name isn’t on the credit agreement and you didn’t sign the contract, or act as a guarantor, then in most circumstances you can’t be chased for payment.
However, if you jointly applied for credit with your partner, or signed the paperwork, then a lender could pursue both of you.
Being married to someone doesn’t mean you inherit their debts. If you don’t have joint finances, like a mortgage or joint bank account, then you can’t be made liable. The same goes if you change your surname when you get married. While it will be updated on your credit report, you’re not legally bound to pay credit agreements in your partner’s name.
Some bills, such as council tax, are different. Even if your name isn’t on a council tax agreement, you can be pursued for any arrears if you are over 18 and lived in the property when the debt arose.
Joint finances are where you’ve applied for a credit account with somebody else, such as a:
When you apply for shared credit, you become financially associated on your credit report. You’ll both still have your own credit reports, however they do become linked. While this can benefit couples who have a good credit history, if either one of you has missed payments, defaults or debts, it can affect the other’s credit applications.
This is because, when you apply for credit in the future, companies may check your partner’s credit history. If they’ve borrowed irresponsibly, it could affect your chances of getting accepted for credit. That said, you’ll only ever be liable for debts on accounts with your name on.
The financial link itself won’t affect your Experian Credit Score. However, having a poorly managed joint credit account, for example with missed or make late payments, could cause yours and your financial associate’s score to drop.
Applying for joint accounts, or adding your partner’s name to your existing accounts, means you are both liable for any payments. So, if one person cannot pay for any reason, the other partner will be responsible for the entire debt.
Contrary to popular belief, there is no such thing as a joint credit card in the UK, so credit cards do not create financial associations. If you allow someone else to become an ‘additional cardholder’ on your credit card account, you remain solely responsible for how the account is run and, as a result, it will only show on your own credit report.
Also, paying rent together does not create financial associations on your credit report. If you agreed to act as guarantor for a partner’s debt, this doesn’t usually create a financial association on your credit report. However, if your partner fails to pay then the lender can pursue you instead and your credit report could be affected.
If you and your partner separate or divorce, both of you are liable for any joint debts. That doesn’t mean you owe just half the money – the lender can ask you for the full amount if they can’t get it from the other person. Unfortunately, this can still be the case if one person withdraws a large sum, or runs up large joint debts, without the other’s knowledge.
If you’re going through a break-up and are worried about your joint accounts, contact your bank and lenders as soon as possible. They should be able to freeze any accounts to prevent any unauthorised activity.
Paying child maintenance does not create a financial association on your credit reports.
This can be a very stressful time emotionally and financially. However, it’s important to act quickly to reduce the damage. If there’s debt on your joint accounts which you weren’t responsible for:
Contact the bank or lender immediately and explain the situation
Add a Notice of Correction to your credit report to say how the debt was caused
Apply to the credit reference agencies for a ‘financial disassociation’ once any joint accounts are either closed or transferred into one name only
If the only remaining link is a joint mortgage and you have been living apart for at least six months, then the credit reference agencies may be able to unlink your credit reports
You can only transfer debt to another person in a very few instances. It depends what form the debt is in:
Credit cards: some providers will let you transfer balances from one person to another, however the request has to come from the person taking on the debt.
Personal loans: lenders usually won’t allow personal loans to be moved into another person’s name.
Mortgages: can only be transferred under specific circumstances, which should be detailed in your original mortgage agreement.
Handling financial difficulties during a bereavement can add an extra layer of strain. If your spouse dies and leaves behind debt, what happens depends on whose name the debts were in.
If they were in your spouse’s name only, the debts are:
Written off, if they don’t have any assets (like savings or property)
Repaid, if they do have assets to cover the cost
If they were in both your names, you become fully responsible for the debt.
If your spouse or partner runs up debts on joint accounts which they can’t repay, then you are legally liable. Taking responsibility for someone else actions is difficult, however working to reduce the debt will benefit your credit report.
If you don’t have the means to pay it off, there are options available to you:
A Debt Management Plan (DMP) is an agreement that can be made between you and your creditors if you’re unable to make payments on time.
An Individual Voluntary Arrangement (IVA) is a binding agreement between you and your lenders to pay back an agreed proportion of the debt over a period of time.
Bankruptcy, usually considered a last resort, is a legal status for people who're unable to repay the money they owe.
If you're worried about money, you're not alone. The charities below offer free, independent help and advice on dealing with debt.
The government-backed website MoneyHelper also has lots of useful information including a handy Debt Advice Locator tool that can help you find confidential debt advice.