This time of year is officially known by lawyers as divorce season, with 106,959 divorces occurring in 2016, an increase of 5.8% from the previous year. According to Google Trends, January is the top time for people to be searching using terms such as “divorce”.
With that in mind, we thought we’d put together a guide about what happens when you break up for those who have partners that have run up large debts.
When you are married it is possible that you will have joint debts; agreements that you will both have signed. These agreements make you ‘financial associates’ and mean that they will show up on your credit report until the debt has been paid and you have requested that the credit reference agencies remove the link. Another way to unlink from a ‘financial associate’ is to put the debt into individual accounts then ask credit reference agencies to have the link to your ex-partner severed.
If you are married, you will usually hold a mortgaged property as ‘Joint Tenants’ this means that you jointly own the property together. The mortgage is a joint debt and you are both responsible for the repayments until one of you has been removed from the mortgage, or you have sold the property and the mortgage has been repaid.
Charging orders on property
If you have a charging order on your home and you plan to sell the property, the debt will need to be paid from the proceeds of the sale. If the property isn’t being sold but is transferring to a single person, then you must agree who will be responsible for the debt and how it will be paid. It might be that the debt is factored into any financial settlement.
Being a guarantor and what it means
If you are or are planning to be a guarantor for your ex-partner you should consider carefully the implications of doing so. Being a guarantor puts you in the position to be liable for their debts should they default on repayments. A guarantor also does not have any right to the title of any goods secured by the debt.
Pets and writs of delivery
If you have a pet or pets, this can be another cause for arguments and contention. If you wish to recover your beloved pet the best way to do so would be with a writ of delivery. A writ of delivery is used to recover specific items, which can extend to a domestic pet. You can read more about writs of delivery here.
Finally, it’s worth remembering that to be severed financially from your ex-partner you should send a notice of correction to the relevant credit agencies so that it is noted that you are no longer connected financially. Here is a link to the Experian form to do this: http://www.experian.co.uk/consumer/financial-connections-questionnaire.pdf
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance