Who is Liable for my Debt?

You cannot be asked to pay for a debt that you are not linked to or liable for in any way, a court cannot order you to take liability for someone else’s debt. This article answers the question: Who is liable for my debt? And explains how debt can affect your spouse/partner.

Who is liable for my debt?

You cannot be asked to pay for a debt that you are not linked to or liable for in any way, a court cannot order you to take liability for someone else’s debt. However, there are some ways in which someone else’s inability to pay their debt can impact you and the household. A couple of examples are:

  • If at some point in the past that person had given a gift of money, or property, to you and at some stage, they are made bankrupt, there is a possibility that you will be asked to return the gift to enable it to be paid into the bankruptcy.
  • It could be that bailiffs are used to recover the debt and if they enter the property to list goods then jointly owned goods may be affected.
  • If a credit card is in your name but you let your partner use it, the liability for the debt on the card is yours, as you gave them permission to use it. The same is the case if your partner is a secondary cardholder.
  • If you are living in a property, but your partner is the named account holder on the gas and electricity bills. You may become liable for paying the bills, if your partner leaves the property, as you have been living in the property.

If your debts are passed on to a debt collection agency, you will still be liable to pay off these debts. You may need to contact the collection agency to come to a suitable arrangement to make your payments.

Please note, if you are a parent it is likely that you will have to pay any debts for your child if they are aged 17 or under.

Who is liable for the debt in joint names?

If your partner has accumulated debt on a joint account and can not pay it back. Unfortunately, you will be legally liable for this debt, as you (and your partner) are deemed to be both jointly and severally (separately) liable for it. You may find it helpful to discuss the situation with your bank to try and prevent your partner from being able to take out any further debt on the jointly owned bank account.

How long will I be liable for my debt?

If you have not been contacted about the debt, have not made a payment, have not admitted to the debt and there has not been a court judgement it is probably unenforceable under the statute:

  • Unsecured debts (loans, credit cards, catalogue etc) have a statute of limitations of 6 years.
  • For mortgages, the limit is 12 years.

However, if the creditor has obtained a judgement against you or you have a CCJ registered against you there is no time limit on the debt. You must repay it. If you had a contractual agreement to pay this debt and the debt has not been settled then the debt is still due. If the debt is in dispute then it remains payable until otherwise agreed, whether by court order or by the company agreeing to waive the debt.

Am I liable for my husband’s debts?

The short answer is no. Your husbands’ creditors can not chase you for his debts. Even if he defaults on his repayments, they can not touch your property or take your money to repay his debts. They will only pursue you for his debts if the debts were in joint names.

Please note if your husband’s name appears on your credit file, this means that you are financially connected in some way.  This means his debt can affect your credit ratings. If you feel that your finances are totally separate from your husbands, you should immediately remove his name off your credit file. This way his debt cannot affect any future mortgage applications you make.

Will I lose my money because of my spouse’s debt?

The short answer should be no. But if the debts are very serious then your spouse could lose their assets – including their share of an asset held in joint names with you. It might be possible for a creditor to take a charging order on the marital home for example. Most married couples plan their monthly finances together and it would make financial sense for you to help your spouse as much as you can.

The same would be true if your spouse was self-employed and not paying tax. You are not responsible for someone else’s personal tax responsibilities and ordinarily, you would not have knowledge of a self-employed person’s accounts to know if they have any tax liability.

If you believe someone is trading, or running a business, but aren’t paying tax on their profits then you can take further guidance on reporting here.

Can debts be separated?

Sometimes with couples or spouses, you may have a personal agreement to pay a certain percentage of the debt. Since this agreement was between yourselves and the lender has not been involved in this decision. This means the original agreement has not changed.

As far as the lender is concerned you still have full liability for the debt and the other parties involved still have full liability for the debt. Your arrangement to repay the debt may mean that you will reach a point where there is no more to pay, all parties have made their payments. Or you may reach a point where you have paid your percentage and the rest is still outstanding and the lender will still see that legally you have liability for the debt.

Please note, it is always wise to review your payment plan on a regular basis, especially after changes of circumstances.

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