Debt: Important Questions and Answers
Debt is certain to be very confusing and complicated in a wide range of situations. You might want to read our questions and answers which help with some of the more common questions that are likely to be asked in relation to debt issues.
Am I likely to be liable for covering debts in my partner’s name?
If you are in a position where you have signed a joint agreement with a partner, you will find that you are equally responsible for making the timely payments until the debt is paid off in full. The only way that you can be liable for a partner’s debt is if you have signed an agreement at the time of taking out the loan or credit. In those situations where no agreement was signed, you certainly have no liability in relation to paying off debts that have been incurred by a partner.
A joint liability payment might also relate to certain areas where you had joint tenancy, such as those that might relate to water and sewerage charges, council tax payments for couples, and arrears on a joint mortgage.
If you are concerned whether or not you are liable for making payments to a creditor, you might want to make direct contact with them to establish whether you are in fact liable for any amount that might be due.
Is there a chance that I could lose my home due to outstanding debts?
If you are in a position of having significant debts it doesn’t necessarily mean that the home is going to be lost as part of any settlement. A wide range of debt solutions are available, and many of these do not include losing the home.
A possibility of losing the home is quite strong if you do find that it is necessary to file for bankruptcy, but you can first look at alternative solutions that might relate to debt management plans or individual voluntary agreements (IVA). They are more likely to mean that you are able to keep the home in your possession while paying off a certain percentage of the debt. If you are in a position of having significant debts it might be highly beneficial to speak to one of the charities or organisations that are able to offer advice and guidance.
What debts need to be paid off the soonest?
Even though it might be tempting to concentrate on the debts that are highest in value, you really want to make certain that you start to pay the priority debts in the first instance, which might relate to the mortgage/rent payments, utility bills, tax, and council tax.