Joint Bankruptcy – Joint Debts And Joint Assets
Joint bankruptcy is only available to business partners. If you’re a couple, and both want to go bankrupt, you must petition for bankruptcy individually.
This means that you must submit two sets of forms and pay two lots of bankruptcy fees.
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.
Joint Debts and 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 of whether explicit permission for given for a particular purchase or not.
Am I liable for my partners debts
You are not liable for anyone else’s debts unless you co-sign a credit agreement or are a 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, you are not be made liable for someone else’s debts.
Joint Liability Debts & Bankruptcy
In the case of joint debts, where one party enters bankruptcy, creditors can pursue the other party for the full outstanding balance of any joint debts. For joint debts to be included in the Bankruptcy
How is a Joint Property treated in Bankruptcy?
If you declare yourself bankrupt and you are a home owner the Trustees in Bankruptcy is required to consider the equity in your property. If your property is jointly owned only your share of any equity can be considered. The other owner’s share cannot be taken into account.
Without a formal written agreement in place, the assumption will be the property is shared 50:50 (or equally between all parties), when the reality might be different. Protecting the rightful share might involve a lengthy and expensive legal argument.