How can I deal with joint debts in Scotland?

What happens if I have joint debts with a partner?

When it comes to joint debts in Scotland, it is typically the case that both individuals named on the debt are equally responsible for repaying the full amount owed. If one person can't or won't pay, the other is legally obligated to cover the full payment, not just their half. This is known as being joint and severally liable.

Joint debt can become particularly problematic should you go through a relationship breakdown or if one party loses their income and the ability to repay their share. You may need to consider seeking professional debt advice if the situation cannot be resolved between the two of you.

What is classed as joint debt in Scotland?

The most common type of joint debt is a mortgage, however, there are other forms of borrowing which can be taken out by two or more individuals such as joint personal loans, overdrafts on joint bank accounts, and joint tenancy lease agreements.

It is important to note here that debts do not become joint – and you do not become liable for your partners debt – just because you are married or live with another person. In order for a debt to be joint, this must have been taken out by both parties with each named on the contract.

Is credit card debt classed as joint debt?

Credit card debt is always individual, even if there is an additional card holder who has used the card and built-up the debt. The legal responsibility for the money owed always lies with the primary account holder regardless of who has actually spent the money so long as no fraudulent activity has taken place.

If you have given someone a second card tied to your credit card account, it is you who is ultimately responsible or repaying the debt. This is not classed as joint debt even if you both are card holders on the same credit card account.

What happens if a payment is missed on joint debt?

If a payment is missed on a joint debt, this will negatively impact both of your credit scores as the default will be registered on both of your credit files. This type of damage to your credit file can make it harder for you to access credit in the future and may also affect the interest rates you will be offered for future borrowing.

If you have fallen behind in paying a joint debt such as a mortgage or loan, you should seek the guidance of a licensed insolvency practitioner or a debt expert for advice on how to deal with your debts.

What are the options for dealing with joint debt in Scotland?

One option for dealing with debt you cannot afford is a Trust Deed. While you cannot take out a joint Trust Deed, it is possible for you and your partner to take out individual Trust Deeds which includes the joint loans.

If only one of you takes out a Trust Deed, the other party will remain liable for the full amount remaining on the joint loan agreement.

An alternative way of dealing with joint debt is to take out a joint Debt Arrangement Scheme (DAS). Unlike a Trust Deed, you can enter into a joint DAS with a partner in order to deal with debts you have together.

How can Scotland Debt Solutions help?

If you have joint debts, either with a current or previous partner, which you are struggling to afford, contact the experts at Scotland Debt Solutions today. Our team of licensed insolvency practitioners and personal debt advisors are here to help you understand your options and take control of your debts. Call the team today.