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One of the most common concerns our customers express is whether their partner’s debts will affect them. With many myths associated with marriage and debt we thought we’d put together a blog post explaining everything you need to know about how your partner’s debt will affect you.
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Marriage and debt
It is commonly believed that when you get married, your credit record will link up with your spouse’s creating a joint file. This is not actually the case. Only joint credit will link you and your spouse together so marriage alone is not enough to impact your credit rating.
Another common myth associated with marriage is that once a partner changes their last name, their credit history is deleted and their file starts again. This is false – your credit history will remain the same, the only difference to your file will be your new name which will have been added as an alias. If you have recently got married you will have to inform your creditors of this name change in order for it to appear on your file. Only once creditors have updated their information will your credit record change to reflect this.
Whilst marriage is not enough to link you and your partner’s credit files, joint credit applications will make an association between you and your partner. Whether you open up a joint account, apply for a joint credit card or get added to an account with your partner, all of these scenarios will join you and your partner together. While this can be great for couples who have a solid financial history, if you or your partner has a background of defaults it can affect the other’s file.
Even if your joint accounts are up to date and you have no current issue with debts, when you establish a joint account your partner becomes a financial associate and will be named as such on your file. Creditors may choose to look up your partner and their history could affect any future credit applications.
Should you or your partner have a wobbly credit history it might be best for you both to keep your finances separate and work on rebuilding the credit file in need. You can find our tips on credit repair here.
Secret financial lives
Despite the effect that your partner’s debt can have on your own ability to access loans or services, a surprisingly high number of people fail to discuss their debts with their loved ones. When we conducted research last year into mental health and money problems, we discovered 80% of people wouldn’t tell their partners about their debts because they were worried about how they would react.
Financial privacy is one thing, but if secret debts threaten the stability of the whole household then it can be a real issue – and an added strain on a relationship. Before linking your finances with a partner it is important you ensure you know about their credit history.
Could you be liable for your partner’s debts?
One thing that scares a lot of people is whether they are personally liable for their partner’s debts. For the most part, you can only be held responsible for debts that are in your name or held jointly in your name – so if you have a shared credit card or bank account with an overdraft then you should check the balance regularly.
If you and your partner are jointly liable for debts then that doesn’t mean you owe just half the money – the creditor can demand you repay the full amount if they can’t get it from the other account holder.
There are some household bills like council tax where you will be considered liable if you’ve been living in the property for a period but for the most part, debts in your partner’s name remain solely their responsibility.
Having said that, if you share a mortgage and your partner is facing bankruptcy then this can have an effect on your stability, although you should be able to protect your half of any equity in the property. The best thing to do is get advice as soon as you know there is a problem; ring us or encourage your partner to get in touch.
When a partner becomes an ex
There are many reasons why relationships fail and the stress caused by debt is a common one. However, if your partner has a lot of unpaid debt and moves out, you may find that collectors and bailiffs pursue them at your address. This can be quite scary but you need to stand firm and not allow the debt recovery professionals into your home. Explain that the debts are not yours and that your ex-partner no longer lives at this address.
If creditors continue to chase you for debts that aren’t your responsibility then you could ask the credit reference agencies to unlink your names on your credit record. However, that will only be possible if you no longer have any financial ties to your ex, including bills and debts in both your names.
Talk to us
If you’re struggling with debt and are worried about telling your partner, or if you’re worried that your partner’s own debt situation needs some proper management then it’s time to get some informed debt advice.
Our qualified, compassionate advisers have experience in helping both individuals and households deal with their debts and they can help you work out the best solution for your financial difficulties. That may be a Debt Management Plan or something more formal like an Individual Voluntary Arrangement, but until you take some advice it can be hard to see a way out of the debt you’re in.
Ring us now on 0800 280 2816. It’s free and we can help you plan your way out of debt.
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