Debt Liability

At present, the Benefits Service do not provide debt or money advice but we have listed some details below that you may find helpful

Am I liable for my partner’s debt?

In general, you are not liable for your partner’s debts but there are some circumstances where both you and your partner are liable for the whole debt/ bill:

• Rent on a joint tenancy
• Joint Mortgage
• Loan secured against your home in joint names
• Loans and credit agreements in joint names where you each signed the agreement
• Overdrafts on joint bank accounts
• Council Tax for any period where you lived together
• Water bills for any period where you lived together

Where a debt is in your partner’s name only and you did not act as guarantor (you did not sign the agreement) you are not liable.

However, if the debt is rent, mortgage or a loan secured on your home, you may wish to pay anyway so that you can stay in your home.

Am I liable for another person’s debt?

Other than partners, you are not liable for another person’s debts unless you signed the agreement, either because the debt is in joint names or because you acted as guarantor.

What happens when someone dies?

When someone dies their debts are paid from any estate (assets) they leave. If their home is jointly owned with a partner, it is not usually part of the estate. Once there is nothing left in the estate, any remaining debts “die with the debtor" except for:

• debts in joint names or guaranteed by someone else
• debts for which a partner is jointly liable
• mortgages, but mortgages on family homes are usually covered by insurance

How to value the estate of someone who has died

Is there a time limit for collecting debts?

If you have not had contact with a creditor for six years (12 years for a mortgage or mortgage shortfall), nobody has made payments to the debt and there is no county court judgement on it, it may be too late for the creditor to start court action. National Debtline has lots of information on this topic.

Are debts covered by insurance?

If you have lost your job or are sick and unable to work, it is worth checking whether you took out payment protection insurance on any loans or credit agreements but remember that there is a time limit for any claims.

If the insurer will not pay, get advice from the Financial Ombudsman Service

I have borrowed from a loan shark

Loan sharks are illegal lenders who often target low income and desperate families. They might seem friendly at first but borrowing from them is never a good idea - even if you feel you have no other options. Loan sharks charge high rates of interest and sometimes use threats of violence against people to get them to pay.

If you have borrowed from a loan shark, you have not committed a crime but they have and they could go to prison. You do not even have a legal obligation to pay them back.

The money advice service has lots of information about loan sharks including how to report them.