Bankruptcy and Joint Loans

lala9

Hi Folks

I am 3 months away from ED but suddenly wondered what happens to the joint loan entry on my credit files. I'm aware that your debts get marked as settled with the date of BR, but what happens if there is a joint loan and the other party is continuing payments, does it get marked as settled on my credit file only?

lala9

Can anybody help??

fermi

Has it ever been defaulted? Are they maintaining the full payments?

lala9

fermi wrote: »

Has it ever been defaulted? Are they maintaining the full payments?

Yes it defaulted about 1.5yrs ago, they are obviously on a DMP and paying only £30 a month instead of the contractual amount. This is the reason I went BR, this horrible person ripped me off, 25k loan and saw nothing of it! I really hope my BR doesn't make them have to not pay it, if that makes sense. Or all this would have been for nothing.

fermi

Well, in that case it will come off your credit files in 4.5 years whether it is marked as settled or not.

Whether it should in the meantime be marked as settled or a partial settlement on your files due to the BR, but not on his is a good question.

- On his files it should certainly be left as unsettled. Your BR won't stop him having to pay it, so that is not a worry.

As for your files, this falls in somewhat of a grey area.

There are 2 arguments:

(1) The credit files should display the actual factual account status. As you were jointly liable, the creditor has not been forced to write off, so the account is still technically live and unsettled. So it stays as unsettled on yours and his until the account status is genuinely settled.

or

(2) That is unfair on you as it does not reflect the fact that your liability to pay the debt has been wiped by the BR, and would result in adverse data continuing to be recorded on your file until the default eventually drops off. So to be fair, yours should be marked as settled.

Which is correct?

Even the ICO seems to be in two minds about this on the occasions when I know it has been queried.

Certainly worth making a complaint about to the lender, and then perhaps on to the ICO if they don't mark it settled, at the very least.

See this link for a similar example:

https://forums.moneysavingexpert.com/discussion/3641267

OK. That was a DRO, but the principle is the same, and they got a positive result by complaining to the lender.

fermi

In the meantime, you can also add a dispute and notice of correction on your credit files to say this was a joint loan that you are no longer liable for.

lala9

Thanks Fermi, that is useful info and I will deal with the loan company when the times comes. Should be an interesting one :-)