Mutual debt with Ex Partner

Trinitrotoluene

Hello all,

Never asked for advice on these forums yet but I have a question on behalf of my partner. When she was with her ex, they got in a stupid amount of debt - to the tune of £28k in loans. When she was with him (about a year before they split) they took out a £20k loan (in both of their names) to clear off her ex's university debts. Now they have split all their loans have been consolidated with a debt consolidation service. He is asking for 50% payment on the £20k loan. I understand she is as liable as him, but it seems unfair seeing as though this loan was writing off his debt alone. Is there any recourse here?

Thanks!

Primrose

I fear the answer is probably "No". Despite the moral viewpoint that the debt was actually incurred by the other party, the moment somebody takes out a loan in joint names, it effectively becomes a jointly owned debt, no matter who incurred it. In the same way, if a property is put into joint names, even though one person may have contributed 100% of its cost, the act of putting it into joint names has the legal effect of giving each individual a 50% share of the property. That is why it is so important to think VERY carefully about the potential concequences of going the joint ownership route, either for assets or liabilities.
Unless your partner can persuade her ex to meet his moral liabilities, I fear she'll have to cough up.

GeorgeUK

Unfortunately she doesn't (that i am aware of).

If she took out a joint loan, she is liable for the full amount - as is her ex.
She could refuse to pay the ex although it may affect both their credit ratings if they defaulted.

What he is asking IS unfair but she is in a bind. If she is not concerned about her credit rating, she could tell him she's not paying for his loan but will split the rest - if he is wanting to keep a good credit rating, he will have little choice but to pay. But if he is the one that doesn't care about his credit rating, she may have a problem.

I would be tempted to tell her to just refuse to pay if he is being unfair in the split of payments. That would force him to take responsibility for the debt or the debt defaults. If it were to default, she may be able to make a full and final settlement offer later to pay for her 'portion' of the loan.

MrC1977

sorry to say - joint debts are exactly that joint debts.

Both myself and my ex have joint debts and we have now started DMPs and I have pay £625 towards the joint debts and she pays £86! doesnt seem to be fair but that is what happens i am afraid

Trinitrotoluene

Thanks for the advice everyone. The situation is very complicated (children involved) so I think I will take her to see a solicitor. The situation is poor, she is not very financially minded and had no idea he was in that much debt. She trusted him and just signed what he asked without reading it.

She has learnt her lesson!

RAS

She needs legal advice because legally she is liable for the whole £20,000. And even if she pays him £10K, if he does not pay the other half, the creditor can take her to court to pay for the remainder.

When you say university debts, I assume you do not mean student loans funded by the Government butcredit cards etc he ran up whilst he was at university?

Trinitrotoluene

RAS wrote: »

When you say university debts, I assume you do not mean student loans funded by the Government butcredit cards etc he ran up whilst he was at university?

Yes, credit cards and overdraft. If she refuses to pay 50% of it can she be taken to small claims court or anything?

Trinitrotoluene

While I'm here as well, the debt management company her ex partner went with is charging 45 admin fee a month. Is this excessive generally as I have no idea for scope for these kind of things.

GeorgeUK

I think he was a fool for going to a debt management company that is charging him interest on a loan and also charging for the priviledge of having that loan. If it was a DMP, that would be understandable, but i think as RAS says, getting legal advice would be the best way forward.