Joint Debts

Question

Hi,

I’m having some problems with my debts; one of them is a loan I took out with my ex-girlfriend to buy some furniture when we moved in together, but now we’ve broken up.  I’ll only have to pay half of that debt back, right?

Answer

A Joint Loan  is something we get a lot of questions about.  While you might think that when taking out a joint loan you are each liable for half the debt, you’re not.  You’re actually both liable for the FULL amount.  This is done to ensure that if one of you defaults on the loan, the creditor will still get their money because the other is still liable. If the other party isn’t paying the loan it means you’re liable to pay the FULL amount.  Creditors are under no obligation to pursue both parties for the debt. If your ex-partner isn’t paying and you’re easier to find, the creditor will pursue you.

If you have a joint debt and you file for bankruptcy or any insolvency option, the balance of the debt will not reduce, only your liablity for it.  To put it another way, the creditor will pursue the other party for full amount.