There are different types of joint debts in Scotland and there is often no one-size-fits-all rule when it comes to credit facilities.
From unaffordable loans, credit agreements and bank accounts to mortgages and shared bills such as utility bills – understanding joint debts in Scotland can be quite complex to some.
If you’ve been left with joint debts to pay and they’ve become unaffordable, Trust Deed Scotland® can help you with expert debt advice to help you manage the situation and take control of your own financial future.
Joint and several liabilities can also apply to other debts, including household bills such as council tax.
If I Marry, Will My Spouse Become Liable For My Debts?
No. You will remain responsible for any unsecured debts that you have taken out in your own name, before during or after marriage.
It’s a common assumption that once you join hand-in-hand in marriage or civil partnership, that your debts then becomes a joint debt. This isn’t always true. Unless you signed the agreement together of course.
If I Divorce, Does Liability Become Joint?
You will be responsible to repay 100% of any debts in your own name.
If there are any debts that you enter into under a joint arrangement, at that point both parties are equally liable for the full debt amount. This is written into most, if not all, financial agreements and the term is known as ‘joint and several liability’.
Where possible, it is always best to come to a fair agreement with the other person in the divorce. Simply ignoring it probably won’t work unless the other person takes full responsibility.
However, this is typically unlikely and will inevitably cause more stress in the long term.
In practical terms, this isn’t always possible as many relationships tend to end on bad terms.
Debt Collectors Are Chasing Me, What Are My Options?
Trust Deed Scotland advise that f you are being harassed over a debt that was accrued by an ex-partner’s, firstly ask for the original contract. If it doesn’t contain your signature or you don’t recognise the agreement, it may mean you have been a target of fraud by your ex. Either way, it’s a good idea to seek legal advice.
If you have correspondence such as emails, text messages, or letters from your ex-partner that admit they owe you money it may be possible to take further action via the small claims court.
However, if you do accept that there is a joint liability for the debt, with incontrovertible evidence to that end, you should seek immediate debt advice.
Reporting credit fraud against an ex-partner can be difficult to do for several reasons. For example, if this was an abusive relationship, you may worry that reporting your ex-partner to the police could result in repercussions against you. If this is the case in your situation, you can speak to your creditor in confidence, as they may have processes in place to help people deal with debt from relationships that end badly or that have a history of abuse.
What Is Financial Abuse?
Financial abuse is a form of domestic abuse. It is a crime and should be reported to the police. Often the abuse is perpetrated by a partner, but it can also come from other relationships, such as friends, family members and carers.
Learn more about protecting yourself against financial abuse.
Financial abuse in the home – whether or not it’s accompanied by aggression or physical violence – can leave you feeling isolated, lacking in confidence and trapped.
You should know that taking the first steps towards reporting financial abuse against you is incredibly brave. Just like seeking debt advice, it may seem scary but you don’t have to do it alone.
Financial Abuse Further Resources:
What Happens To Joint Debts When Either Person Dies?
If you have any joint debts with a spouse or any other party who have died, the debt will become your sole responsibility. This is true if you were a guarantor for a debt owed by the deceased.
When someone dies, their debts become a liability on their estate. The executor of the estate, or the administrator if no will has been left, is responsible for paying any outstanding debts from the estate.
When the debt is not in joint names, if there is insufficient money or assets in the estate to pay off all the outstanding debts, then the debts would be paid in priority order until the money or assets run out. Any remaining debts are likely to be written off.
Surviving relatives will not usually be responsible for paying off any outstanding debts for the deceased unless they acted as a guarantor or it was a joint debt.
Are Guarantor Loans A Good Idea?
In our experience, the answer is usually No. Guarantor loans are risky and you should only ever accept the role of being a guarantor if you feel that you can pay the debt on the borrowersbehalf. If you have been considering applying for a guarantor loan to consolidate your debts.
Many loans providers are under increased scrutiny due to irresponsible lending. If you’re struggling with a guarantor loan due to Coronavirus, you may be eligible to apply for a guarantor loan payment break.
From borrowers, complaints to the Financial Ombudsman Service have included:
- I shouldn’t have been given the loan because I couldn’t afford it and the lender should have known this at the time
- My financial circumstances have changed and I can no longer afford to make the repayments to my loan but the lender isn’t treating me fairly
- didn’t apply for the loan
- The lender won’t let me include this loan in a Trust Deed or Debt Arrangement Scheme
- I’m having problems with my credit file because of the loan
- My guarantor has been contacted too quickly
From guarantors, complaints to the Financial Ombudsman Service have included:
- I didn’t agree to be a guarantor
- I was pressured or forced into being a guarantor
- It wasn’t properly explained that being a guarantor meant I had to make the payments if the borrower didn’t
- The lender should never have accepted me as a guarantor because I couldn’t afford to make the payments
- The lender should never have given the loan to the borrower in the first place
- My circumstances have changed and I can no longer afford to make the payments
- The lender is threatening to take me to court
- The lender is repeatedly contacting me for payment
Do My Credit Card Debts Have Joint Liability?
Credit card agreements always have a primary cardholder who is responsible for repaying all debts that occurred as a result of the use of that card, even if they come from an additional authorised cardholder.
Even if the card was used to purchase household items or a car used by the other partner for example; ownership of that debt lies solely with the primary cardholder.
Can I Hide My Debts From My Partner?
Although Trust Deed Scotland® would usually advise against hiding debt from your partner for many reasons.
Can We Get A Joint Trust Deed?
Joint Trust Deeds don’t exist as such, however, both parties can have a separate individual Trust Deeds.
Either party is free to have their Trust Deed managed by separate firms, though it could be argued that it is more advantageous to work with the same adviser as you will both most likely share bills and expenses.
Trust Deed Scotland® always recommend speaking to an expert debt advisor as they will be able to explain your options and provide you with a personalised illustration based on your own circumstances and then your partners also, depending on the situation presented.
When an individual enters a Trust Deed they would typically have £5,000 of unaffordable, unsecured debt. This debt ratio would therefore need to be maintained in order for both parties to be considered for their individual Trust Deed.
Can We Get A Joint Debt Arrangement Scheme?
Yes. If both you and your partner have unaffordable debts, you may apply for a joint Debt Arrangement Scheme, as long as you both have enough qualifying debt and for a joint DPP proposal to proceed, both applicants must consent to the DPP proposal.
Couples who have at least one debt for which they are jointly liable
may apply for a joint DPP if their relationship falls within the following
- Husband and wife or living together as husband and wife
- Civil partners
- Living together in a relationship with the characteristics of a husband and wife relationship, except that they are of the
When To Seek Debt Advice Over Joint Debts?
If you think you, your partner, or both of you have an unaffordable debt problem – seek qualified expert debt advice today.
If you do something about your debt today, you don’t need to worry about it tomorrow.
Reputable debt advice companies such as Trust Deed Scotland® and debt charities are regulated by the FCA, this should help ensure that neither you or your partner are ‘sold’ into a debt solution and that you are both fully aware of the pros, cons, and alternatives.
Call us on 0141 221 0999 or try our Trust Deed Wizard® to get started now.