Bankruptcy And Joint Debts

There is often confusion when to comes to joint debts. Which debt really are joint and what happened when one party can’t pay?

Joint Debts Explained

Joint debts are when two or more parties (people) have signed a credit or loan agreement together, or some other form of agreement for goods or services to be provided for the benefit of all parties. In most cases, all parties are individually responsible for the full amount of the debt.

This is called joint and several liability. It is not true that, in such circumstances, each is liable for half the debt. If one person can’t (or won’t) pay, creditors can and will pursue the other for the full outstanding amount.

It does not matter the purpose of the loan, who spent the money, or who benefited from it. It does not matter who is, or has been making repayments to date. If the debt is a joint one, it does not matter if the cause of the debt is the other person’s financial irresponsibility. In the eyes of the law you are both responsible for the settlement of the entire debt.

Your Partner’s Debts

You are not liable for anyone else’s debts unless you co-sign a credit agreement or are acting as guarantor.

This is true even when you are married, have a civil partnership, or live with them with shared financial responsibilities such as children or joint mortgage. Conversely, someone else’s debts can’t be included in your bankruptcy.

Joint Debts on Credit Cards

Often there is confusion about who is liable for credit card debts. Credit cards are never issued in joint names.

The credit agreement is with a primary cardholder, who may have requested an additional card for their spouse/partner. Any additional cardholder is simply given the facility to use the the primary card holder’s credit. All debts are in the primary cardholder’s name. It does not matter which card is used.

Bank Accounts

Bank accounts that have been opened under two joint names are also liable to be caught up in the insolvency, and must be submitted to the Official Receiver, who will calculate an amount to deduct on your behalf. It’s likely all access to these funds will be frozen whilst this is assessed, meaning the account will be unavailable to everybody else too.

Impact on the other party

Should you become bankrupt – the the full liability of the debts will fall upon the other party. This may leave them with large financial headache and in impossible situation.

Money Helper (formerly The Money Advice Service) is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here. is not regulated and is for fact-finding only. We can help assess your circumstances and point you to someone who can provide available options that suit your debt criteria.

If an individual meets the required criteria for an IVA based on our packaged case, this will be passed to one of our partnering Insolvency Practitioners to get direct advice. If the individual does not meet the criteria for an IVA, The Insolvency practitioner is able to provide contact information for other third-party organisations that offer advice on other available debt solutions. For full details view our Privacy Policy.

If you decide that an IVA (Individual Voluntary Agreement) is not the best option for you after we have prepared the necessary information, you can opt out of the process and have all of your details removed. We receive a fee from the third party that we refer you to for introducing you and for the work we have completed. However, you will not be responsible for paying this fee. The third party will contact you directly to continue the process of your IVA application or to explore other solutions, but only with your permission after we have introduced you.