Joint Debts: How Can It Affects Me?

There are several types of joint debts such as credit card, joint loans, or joint accounts. In most instances, both debtors are liable in repaying the debt. This is regardless of who used the money or how was it being utilized.

Joint debts can cause issues when one of the debtor is unable to pay the joint debt. If this happens, the other debtor will be liable to pay off the entire debt alone. This usually occurs during divorce or separation, and other relationship breaks down. It normally boils down when there’s a disagreement on who should be responsible for the repayment.

Understanding Joint Credit Agreements

Once you took out a joint debt may it be a personal loan, it implies your agreement towards repaying the whole debt. This occurs when the other person can’t pay it or won’t. This means, even if you haven’t spent a single amount from the money, you’ll still be liable to pay for it. The responsibility will all be on your plate once your partner refuses to pay the debt taken in joint names.

Joint Bank Accounts and Overdrafts

Joint bank accounts grants access to two individuals in sharing the money in the account. This is mostly seen in couples who run a joint account to pay their bills and other living costs for instance.

Certain joint accounts appear with an overdraft facility, allowing you to obtain money as other unsecured debts. Associating your money with someone else can be perilous. This is because when the account is overdrawn you’re both accountable for paying it back. Both individuals identified on the account can also take out money they regardless of whether the money was funded by the other person.

We suggest you discern thoroughly before starting a joint bank account with someone. This is despite intimacy or relationship status. Some couples favour to retain their personal bank accounts and simply transfer an acknowledged amount into the joint account to meet shared expenses.

Does marriage make me liable for my partner’s debts?

Being married to someone in debt does not make you accountable for any debts unless you act as a debt guarantor or took the debt jointly.

Any debts or financial commitments that your partner has with their name on it will only have them accountable to it and not you. Even it does not affect anyone living with you on the same address.

Credit Cards in Joint Names?

Credit Cards CANNOT be taken in joint names. There has to be a cardholder who will be responsible for paying off the debt.

However, you can have an additional cardholder who will be issued the same card. This allows you both to share the credit limit on the card. This person will not be held liable to pay off the debts since they are not the main cardholder.

How can joint debts affect my credit file?

Once you too out a joint debt, your credit file is associated. This means once a lender conducts credit review, the other person’s credit record can be taken into account though you’re applying in your name alone.

Both your credit files are affected once you consider joint debts. So, if the other person stops paying the debt, or in case of missed payments, you will also get the same marked on your credit. This means you have to cover the payments so as not to jeopardize your credit history.

Debt Help and Advice

If you’re struggling to pay your joint debt with someone, or when the other debtor is finding it difficult to make payments, We can help.

Together we will create a realistic budget that can help you put your debts under control. You can use our debt advice tool or speak with our debt experts at 0800 193 1024.