"Joint & Several" - What does this really mean

HaSBeenConsolidated

Having been caught out by the true meaning of this phrase in respect of a Bank Loan, I'd be interested to hear your thoughts on what this really means - i.e. What it's true impact is when related to Loans.

I think it originated in the areas of Negligence & Tort, where Liability for the damage caused lay with several people or organisations. It enabled the person claiming compensation, when successful, to have access to funds of any one of those held liable, even if just 1%, to fulfill the entire damages award.

[Deleted User]

It means that all parties, either jointly or individually, are responsible for the full repayment of the debt.

John1993_2

As above, it means that each person is completely respponsible for the loan, as opposed to each person being responsible for only "their share" of it.

Loans taken out this way are cheaper than each party taking out a loan for the fraction of the total, as the bank is more likely to recover its funds.

HaSBeenConsolidated

If the parties divorce will it be possible to split the debt between the two parties equally / unequally?

If the parties are not married and go their separate ways, will the debt be split so that each assumes responsibility for their share of the Loan - for example 45% - 60%.


Splitting the Loan like this is what appears to be assumed to be the likely outcome.

SeanG79

A lender is unlikely to ever split the loan as it doesn't make sense to increase their exposure to risk and reduce their chances of receiving the full loan amount.

The only way to really achieve this split is for each individual to take a separate loan in only their own name and then to pay off the existing loan. The obvious risk is that the other party doesn't contribute their share and you are left in a worse situation...

[Deleted User]

It's highly unlikely as it reduces the chance of the lender being repaid.

If responsibility for part amounts is needed, then separate loans should be sought in the first place.

p00hsticks

HaSBeenConsolidated wrote: »

If the parties are not married and go their separate ways, will the debt be split so that each assumes responsibility for their share of the Loan - for example 45% - 60%.

No - the lender will go after each / both parties (whichever they think they have most chance of getting the money from) for the whole balance of the loan until it is repaid.

AFK_Matrix

Don't bother replying to this person, they have already been told all this in their other post here:

https://forums.moneysavingexpert.com/discussion/4753133

They just can't accept that you can't split a loan and each party is responsible for the loan. No helping some people I guess!!

John1993_2

HaSBeenConsolidated wrote: »

If the parties divorce will it be possible to split the debt between the two parties equally / unequally?

What do you mean? "Fair" will depend on the couple's means and needs, and will need to be agreed between them. That's not the lender's problem. They are both liable for the whole loan.

Why are you even asking this, you've had the situation explained to you over and over now. The loan is not "split", it's owed in full by both parties.

Brock_and_Roll

"joint and several" liability is a very old and stable legal concept in English law fully supported by case law over the years.

Having read the OP's other thread, the OP is looking for a way to enable a 3rd party to get out of a joint loan agreement that was taken out. In short one parter was just 18 and naive, the other partner older and in more debt. Suffice to say that the couple split and the older partner has naffed off and/or has no money, leaving the younger partner in a hole.

The OP is looking at pursuing a mis-selling claim elsewhere (good luck with that!) but to be clear the OP has absolutely no hope whatsoever of challenging the concept of joint & several liability.

ReadingTim

What joint and several liability means has been clearly covered by other posts, but I'd imagine there are more people who don't know/appreciate what it means than do, such as the OP.

I'd be interested to see the extent to which the "and several" part of the phrase is adequately explained in any 'key facts' / T&Cs; or if the phrase/explanation was amended to 'jointly and individually', as that would probably mean more to the average reader!