It is common to wonder whether your partner’s debts might affect you, and whilst the answer might not be straightforward, it might surprise you.
Each partnership is unique, and how you deal with your finances is a matter between you and your partner – you may deal with your finances together, completely separately, or a combination of the two, with a joint bills account and individual accounts. Money is something that affects an enormous number of relationships, and it can become even more challenging when those relationships end. So how, and in what ways, could your partner’s debt affect you?
Personal Debt
Your partner’s unsecured personal debt is taken out privately in their name, and will in no way become your responsibility. If your partner fails to pay their debt, their personal debts will never become your debts, and their creditors are not legally allowed to contact you to attempt to make you pay your partner’s debt. You will not be held responsible for a debt somebody else has taken out in their own name.
If the debt is not secured against your home, then it will not affect your property. Many people believe that their address will be “blacklisted” if their partner fails to pay, which isn’t the case. Your home will be the place that their collections letters will be addressed to, but any defaults will be marked on your partner’s credit file; not against your home. If you have separated and your partner is no longer living at your address, be sure to return all correspondence to the sender, rather than just throwing it away.
It’s also important to remember that your partner’s debts, and any defaults that they may have if they fail to pay their creditors, will not be listed on your credit file, which is unique to you. There may be a link, as you may be financially associated with one another, but it will not reflect badly on your credit file, as long as you keep up with your repayments to your own debts.
If your partner is struggling to repay their personal debts, you may have collection officers, also known as bailiffs, turning up at your door. But because the debt is not in your name, they cannot take anything that belongs to you. Whilst you may want to help, always remember that you are not financially responsible for this debt,
Joint Debt
Should you cosign for any debt with your partner, such as an unsecured consolidation loan, a mortgage or a car hire purchase agreement, you will both be equally responsible for that debt, even after separation or divorce. This is because you are “joint and severally liable” for the whole debt, meaning that you are both responsible for the full amount of debt until it is paid in full. So if you have a joint debt, and have separated from your partner, but have an agreement that your ex partner will pay the debt, and if they don’t keep up their repayments, the creditor will be able to chase you for the full amount of the debt. If the matter has been through court, and there are clear directions within the divorce proceedings, this can be presented to your creditor.
This is why it is a good thing to know and understand your partner’s financial status and ability to deal with money before entering into any joint debt with them. Also, should your partner die, you will become responsible for the entire debt, so before signing anything, you need to be sure that you could carry the debt alone, if anything should happen to your partner.
Relationship Strain
Your partner’s personal debt may not put you in any danger of having to assume it should they fail to pay, but there are other ways in which it can affect you.
If your partner is struggling with their finances, they may rely on you to carry the bulk of the financial obligations within the household, which may put pressure on you, and ultimately your relationship, and if their spending habits are out of control, it is likely to only get worse.
There may also be instances when your partner is unable to obtain credit in their name due to poor credit history, and will ask you to take out a debt in your name, with the promise that they will maintain the payments. This is relatively common, but it’s important, before you take on this additional credit, that you fully consider the implications if your partner fails to pay whilst you are together, or if you should separate. As the debt is in your name, any defaults will be registered on your credit file which, in turn, will impact your credit score. Unfortunately, your partner cannot be chased for the debt, as it is ultimately your financial responsibility, not theirs.
If you are currently being impacted by your partner’s debts, or are struggling, yourself, as a result of their debt repayments, please contact our non-judgmental team at Debt Movement for caring and understanding debt guidance and solutions.
