Partner's Liability

mcfayden

Hi, hope someone can help.

About 3 years ago I took advantage of low rate deals on credit cards to fund the start of my business. My salary was going towards repayments but in the last year I have not been able to pay myself. My business is now entering insolvency.

The National Debtline advised me to get in touch with the credit card companies and send them an income/outgoings budget plan. It asks for partner's salary. What I would like to know is does my partner's salary need to be incorporated into the plan? As far as I am aware my partner is not responsible or liable for my personal debt. Can someone confirm?

Many thanks

blind-as-a-bat_2

I totaly agree your debts are just that, your debts, nobody elses responsibilaty but yours.

However it has been standard industry practice from the help lines to the court service to include your partners income in calculation, simply to maximise there returns.

The truth is they have no right to ask for a full break down of your partners income, but it is fair that where you have joint household expenditure, your partners contribution, as a % in relation to what they earn and you earn, should be shown, nothing more than that IMHO

fermi

Just had a look at the NDL budget planner, and yes it does include your partners income in the total income available to repay your debts.

I agree with Bat. That is totally wrong.

Your partner may have surplus income after essential payments are made, or they may not. If they do then that may be genuinely spare income, or they may have their own non-priority debts to service.

Personally, I would either do as bat says and put as their income only what they contribute to shared expenses, or enter it as zero and in the expenses section only put your share of any joint ones.

maxmycardagain

were the credit cards yours alone or joint?

is your business a ltd company or you as a sole trader?

fermi

mcfayden wrote: »

As far as I am aware my partner is not responsible or liable for my personal debt. Can someone confirm?

Credit cards are the liability of the account holder only.

Since they are never "joint" accounts, then your partner cannot be liable. Even if you request that they are issued a card on the account, the account itself and any spending on it is still your sole responsibility.

blind-as-a-bat_2

fermi wrote: »

Just had a look at the NDL budget planner, and yes it does include your partners income in the total income available to repay your debts.

What gets me is the DRO calculator does the same too, granted it does have a section for non dependent's contribution, but it does ask partners income, implied as full income :rolleyes:

fermi

blind-as-a-bat wrote: »

What gets me is the DRO calculator does the same too, granted it does have a section for non dependent's contribution, but it does ask partners income, implied as full income :rolleyes:

I know they have to have a "one size fits all" approach to these budget sheets, but as discussed that is too big a presumption.

But the authors of these have as much interest in keeping creditors happy as they do for the debtor.:rolleyes:

mcfayden

maxmycardagain wrote: »

were the credit cards yours alone or joint?

is your business a ltd company or you as a sole trader?

Thanks for reading my post. The credit cards are mine alone and the business is limited.

maxmycardagain

if you didnt give personal guarantees for any ltd company debts then the ltd company can burn and sink with no impact on you personally

sole debts are not your partners worry either.

mcfayden

Further to my previous enquiry.

My boyfriend is currently remortgaging the flat. I am on the deeds as a 10% owner; my boyfriend has always paid the mortgage himself but originally we needed my salary to make the mortgage multiple work, so I went on the deeds.

He can now remortgage by himself which he is in the process of doing, so I shall shortly be removed from the deeds.

I don't want to do anything inappropriate but at the same time I would like to protect my boyfriend as much as possible from any fallout relating to my bankrupcy.

We had intended to do the equity transfer at nil value; this fits with the understanding we had in our relationship that he has always paid the mortgage and basically owns 100% of the property; I was only on the deeds out of convenience for the first mortgage.

However, this would be an undervalue transaction and would this then open up my boyfriend to potential claims from my creditors?

I also happen to owe my boyfriend a huge amount of money (far more than the sum of my creditors) and it occurred to me that a way of protecting him could be to do the equity transfer at market value and deduct that from what I owe him.

I would be very grateful if anyone could advise as to whether I am allowed to do either of these and if so which one is preferable?

beentheredonethatstilhere

NOOOOOO!! Don't do that. Please don't.

If there is equity in the flat then your OH will have to give you what it is worth. If you don't the OR will come after him for the money and it could get messy. Do not pay your OH above any other creditor either as he will be asked to repay it to the OR as well. You CANNOT favour a creditor.

When you go bankrupt your OH's debt will go into the pot as well like any other creditor. If you want to come to an informal arrangement after bankruptcy to give your OH some money towards the debts then that is up to you but don't let on to anyone.

I would wait till after your bankruptcy to remortgage but someone else might see differently.

How much are we talking cash wise if he remortgages and gives you some? Is there any equity in the property?

Please make sure you get some proper advice from somewhere like Business Debtline.