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.
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.
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.
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.
The Register of Insolvencies is a public register that documents Trust Deeds until five years after the discharge date and includes personal details.
Joint Trust Deeds don’t exist, however, if you want to run a Trust Deed that encompasses debts as a couple, this will be two individual Trust Deeds.
Our Scottish based team can help advise you on your debt problems.