What happens to my personal debts when I get married?
December 19, 2018
If you’re getting married and are worried about what happens to your personal debts, initially you need to consider whether the debts are in your name only, or are joint with your partner – this determines if your spouse can be held responsible for repayment.
So let’s look at the legal situation regarding personal debt when you get married, and also how being in debt might affect your spouse’s financial situation
If you have debts in joint names, such as a mortgage or a joint loan, you’re both equally responsible for repaying the lender. If your spouse cannot afford their part of the repayment, you can be pursued by the loan provider for the full outstanding amount.
Holding joint debts also creates a financial ‘association’ with your partner/spouse. This will be reflected in your credit file and held by the credit reference agencies as a source of information for potential lenders.
What about debts in your sole name when you get married?
The liability for debts in your own name is yours alone, even when you get married, and your spouse won’t be approached by the lender for repayment. There is one exception to this rule, however
Your new husband or wife has no responsibility to repay any of your debts unless they’ve agreed to act as guarantor for one or more of your loans, in which case they can be pursued for repayment in full.
Your debt situation can affect your partner
Unfortunately, the fact that you have personal debts can affect your partner in another way, not only when you get married but also beforehand. If you’re financially linked due to a joint loan and your spouse applies for new credit or borrowing, lenders and credit card companies may take into account your credit record as well as your spouse’s when making a decision.
If they see from your credit file that you have a number of outstanding debts, or defaults if you’ve fallen into arrears during the last six years, this may negatively influence their decision.
Improving your debt situation
There are various procedures in Scotland that can help you escape debt if you’re struggling to keep up repayments. These include the government-backed Debt Arrangement Scheme (DAS), and Scottish Trust Deeds, which both prevent legal action being taken against you by your creditors.
Alternatively, you may simply need to formulate and work to a monthly budget that guides your spending and prevents your financial situation from worsening. You also have the option of negotiating with creditors informally, but you should make sure the results of successful negotiations are confirmed in writing by the lender(s).
If you would like further information and guidance on how personal debts can affect a spouse or partner, Scotland Debt Solutions can help. We provide reliable professional advice, and can help you to escape debt for good. Call one of the team for a free same-day meeting – we work from four offices around Scotland.
When taking out a joint loan, there are many things you need to consider. Signing up to a joint credit agreement is a huge commitment and it’s important to ensure you have all the facts before signing on the dotted line. While no one wants to think about a relationship breaking down, the truth is […]
If you’re looking to save some money it’s a good idea to make a detailed budget that lets you see where your cash is currently being spent, and offers an overall view of your finances. You’ll need to collect together your income and expenditure details, including annual costs such as insurance, car expenses, birthdays and […]
A trust deed is a common debt repayment programme based around a voluntary arrangement made between you, your creditors and a qualified independent trustee who takes control of your debt repayments for a typical period of four years. If you’re having difficulty paying your debts and have assets or a regular income, you may qualify […]
If you have built up debt from gambling, you may be able to write off part or all of the debt via a formal Scottish insolvency route. Not all insolvency solutions allow debts to be written off, but you may be eligible for a trust deed if you meet certain criteria, with sequestration also being a possibility […]
Her Majesty’s Revenues and Customs (HMRC) is one of the biggest creditors in Scotland, and indeed across the rest of the UK. Millions of people make payments to the government through HMRC in the form of income taxes, National Insurance and VAT every year. For the majority of people in employment, this is done automatically […]
Council tax is a charge levied on residential property and payable to the local council. While some properties are exempt from paying council tax, most households must factor this bill into their monthly budget. Households will be given a yearly charge which can then be broken down into a series of monthly instalments throughout the […]