Unless clear lines are drawn, however, you may be unsure as to who is responsible for payment of each portion of the outstanding debt. Bennett Jones can explain what your rights are and the amount you owe under the terms of your debt agreements.
What is meant by “Joint Debts”?
You can share an obligation to make payments such as utility bills, mortgages, rental contracts and shared bank accounts. In some cases, you will be liable for only half of the amount owed under the terms of these contracts – with your partner, spouse or relative being responsible for the payment of his or her share.
More commonly, however, you will be responsible for payment of the whole amount which is owed – even though you have agreed with the other party that the debt will be repaid in equal shares by both of you. This means that if your partner, spouse or relative fails to honour their side of the agreement, you will find yourself being called on to repay the full amount of the outstanding debt.
Why might such agreements prove problematic?
There’s no guarantee that everything will run as smoothly as was expected when the original joint debt was incurred. When family relationships or marriages break down, it is not uncommon for an individual to find they are called on to repay debts which they firmly believed would be repaid equally by them and their partner, spouse or relative. It is not uncommon for one of the parties in an agreement to be unable to, or to refuse to, pay his or her share of the outstanding debts. This can often result in debts becoming unmanageable.
In some instances, the death of a partner or spouse can sadly also result in the surviving partner being called on to repay outstanding debts which then become unaffordable.
Get help with Joint Debts from Bennett Jones
We’ll help you understand the terms of all your financial agreements and help you move forward, clearly understanding your financial position and the options available to you.