Joint Debt & Bankruptcy.

WoodruffsDad

On the advice of the CAB I am about to commence bankruptcy.

I have one bank account (Smile) which is a joint current account with my wife but it only has about £80.00 in it.

We also have a joint Smile Visa card account on which we owe about £7,000.00.

The bankruptcy is solely mine. What will/should happen with these joint accounts?

rog2

As far as the Credit Card is concerned, Egg will chase your wife for the WHOLE of the debt.
I would close the joint account BEFORE your bankruptcy, but you will still need to declare it to OR.

WoodruffsDad

Thanks again Rog2.

What about converting the joint current account to a sole account in my wife's name? As we both have the same surname and first initial it would make it easy for banking my salary cheque.

Does this mean that my poor wife will be solely responsible for the £7,000.00 joint Visa debt?

fermi

Is this really a joint Visa account, or is it simply (as usual) in one persons name with the other person as a second card holder?

There is a big big difference. See:

http://www.payplan.com/debt-library/joint-and-several-liability.php

If you have taken out a credit agreement, such as a loan or bank account in joint names (with another person) then you are both liable for the full amount of any debt.

NB. Credit cards are not taken in joint names, if you have two cards, then only one cardholder is considered the account holder. They will be responsible for full repayment for the debt, regardless of which card was used.

This means that if you have a joint loan with a spouse or partner and one of you fails to repay the debt (this often happens following divorce or separation) then the lender could still ask you for payment of the full amount (not just half).

The lender cannot recover the money twice but can pursue both of you, or just one of you, for all amounts still outstanding until they have obtained full payment.

Joint and several liability can also apply to rent arrears on joint tenancies, arrears on joint mortgages, Council Tax payments and water charges on properties that have been jointly occupied.

I did not sign any agreement what can I do?

For an agreement to be joint and several then it must be signed by all parties (except for Council Tax). If a lender says you are jointly liable for a debt and you believe this is not the case, it may be worth asking for a copy of the original agreement. If you have not signed it then you are not liable.

Peter_Pan

Hi

We are in a similar situation and have been in touch with the National Debtline and the CCS and you can change an account which is in credit but would have to declare it but any bank account account which is overdrawn in joint names the other partner becomes liable for that debt not sure about credit cards