What Happens to Your Debts when you get a Divorce in the UK?
Personal debt is not just split down the middle, even if it comes from a shared personal credit card. Instead, personal debt is dealt with depending on the individual circumstances of each spouse, including whether they can pay off their debts themselves or need to be paid off by their ex-spouse. This blog will explain exactly what happens to debt in a divorce and how it is divided.
How Is Debt Divided in a Divorce in the UK?
Whether debts are shared between partners in a divorce is dependent on the type of debt and the circumstances. When you are going through a divorce, it is important to have a look at who is legally responsible for any outstanding debts. Typically, the person who signed the credit agreement is accountable.
Put simply, personal debt is separate in divorce unless it comes from one combined account. Courts may also choose to divide up debts when calculating how to award assets between you and your ex-partner. They will usually look at whether the debt was incurred during the marriage, and if it was to pay for something that would benefit both parties or simply one.
Additional Information
In divorce, personal debt is separate from what is known as ‘family’ or household expenses. Family expenses are usually considered to be things such as food for the family, mortgage, rent, and so on.
Debt from a Joint Account
When you take out a joint credit agreement, such as a mortgage, you become financially linked with your partner. This is called a financial association. When you have joint debt, you have to be careful that it does not impact your credit score. Notably, your ex-spouse’s borrowing history could affect yours. It is, therefore, important to communicate with your ex and agree on how and when you each make payments towards your debt.
When there is a personal debt that has both parties’ names on it, a judge will typically allow a 50/50 split of this debt and its associated interest combined. However, this is only if one spouse doesn’t declare bankruptcy before their partner does.
Who Is Responsible for Credit Card Debt in Divorce?
One personal debt that’s crucial to think about during separation is personal credit cards. As well as personal assets obtained from a joint credit card, you are sometimes able to ask for personal credit card debt to be divided equally if the personal card was shared, but not always. It often depends on what your lawyer recommends.
Seek Expert Advice
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