You arrived at this page by selecting:Debt, Debt and Joint Debt (YEP 17/04/08)
At the moment everyone seems to be talking about credit crunches, property crashes, and personal debt. It's a grim picture to the say the least and people getting into financial difficulty does seem to be on the increase due to various circumstances through either the economic climate, receiving bad advice or just foolish planning. The worst thing those people can do is bury their head in the sand and do nothing. Burying your head in the sand will certainly manifest itself in home repossessions, county court judgements and debt collection companies knocking on the door.
Communication is certainly the key to lots of things and in this situation it is no different. Open and honest communication directly with the company you owe money to is the best way forward in coming to some arrangement and hopefully a satisfactory conclusion for both parties. Incidentally choosing bankruptcy/IVA as a solution might seem a quick fix but long term it might not be the best option for you if you ever want to borrow money again in the future.
But what about joint debt, a debt connected with someone else such as a joint mortgage? Well if you decide that you no longer want to be with that person anymore and want to split up the mortgage lender is entitled to, and only concerned with, receiving 100% of their payment. It is open to the lender, if they so wish, to try and collect 100% of the debt from any persons who are jointly liable, not necessarily 50% from one person and 50% from the other if there were only two people involved.
Even if one person has moved out and is living elsewhere with other expenses. It doesn't make any difference. If you put your name to a loan than you are legally bound to that loan whether you are living in the house or not.
Incidentally if you are splitting up and are looking to split your financial assets then married couples and co-habiting couples are treated very differently under English Law. Divorcing does not affect the right of the lender to their mortgage payments but it can affect the rights of the parties. There is usually extra protection for a more equal deal under divorce law but if you are co-habiting the rules are different. If you are not married then co-habiting couples are very much treated as a business relationship and there is no 50/50 starting point when coming to a settlement deal. The legal implications are very similar for co-habiting couples and people who are perhaps just in business together in the property game. It makes sense to understand and seek advice surrounding all the legal implications of getting into debt with another person just to make sure you know where you stand if it all goes wrong.
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