Joint Account, Debt moved to 2nd Party

Jon_P_W

Hello,

I am looking for advice with the following situation.

Back in 2005 I shared a house with a friend.
We opened a joint account.
We left the house in 2006.

Through absentmindedness we didn't close the account or remove one of us!

I had multiple accounts and continued to use the account. It went into debt and in 2010 I started a debt management plan for multiple unsecured debts.

In 2017-2018 I went through personal bankruptcy.
At the end of last year the other party of the joint account was contacted by Moorcroft with a debt in his name from that joint account.

(He's a close friend and we are openly discussing the situation).

Natwest won't remove him from the account and Moorcroft say he is now liable for the debt. They are happy to start a plan with me to pay off the debt.

I accept responsibility for the debt. But as I was clearly not very good at managing my finances, wish I had removed him and then the debt could have been included in my bankruptcy.

Is there any known way that I could get him taken off the account and the debt included in my bankruptcy?

Could I claim that I had sent in a form to remove him from the account back in 2007 and assumed that it was done?

Many thanks in advance for your help.

molerat

Is there any known way that I could get him taken off the account and the debt included in my bankruptcy?

No. It is an account with joint and several liability. As you are no longer responsible for paying it due to bankruptcy then they are.

Could I claim that I had sent in a form to remove him from the account back in 2007 and assumed that it was done?

If that was actually the case and you have evidence of that then yes. Otherwise no, committing fraud is not a good idea.


The only way out is for your friend to pay it off. I very much doubt that you could pay it off as that would be favouring one of your creditors over the others.

broaps

Is the debt not the responsibilty of whoever took out the debt? If I borrow money but the payments are made from a joint account why should the other account holder be liable? Is it not likely that Moorcroft are trying it on as they seem prepared to offer the OP a repayment plan?

This isn't like an overdraft which is jointly owed by both account holders or a joint loan. If your friend was not part of the original debt I don't see how he can have to pay it back now.

molerat

That is the problem with joint and several liability on an account, one person usually ends up getting stiffed in these situations. Also how can OP pay off one debt and not pay off the others, what have the other creditors done to deserve this unfair treatment ?

broaps

molerat wrote: »

That is the problem with joint and several liability on an account, one person usually ends up getting stiffed in these situations. Also how can OP pay off one debt and not pay off the others, what have the other creditors done to deserve this unfair treatment ?

Unless the debt was taken out by both parties with joint and several liabilty the fact that the payments were made from a joint account is irrelevant. A joint bank account only makes both parties responsible for any overdraft or joint loan taken out with the bank and has no effect on any other debt owed individually which happens to be paid from the account. If the OP is the only person who borrowed the money the friend is not reponsible to repay any of it and Moorcroft are trying it on.

For example,I had a personal loan with Lloyds which was paid from the joint account I had with my husband. When I became BR my husband had no liability for the loan as I was the only one who took out the loan. The overdraft on the account was a different matter as it was subject to the joint and several liability.

molerat

The debt is on the joint account according to the op.

Jon_P_W

molerat wrote: »

That is the problem with joint and several liability on an account, one person usually ends up getting stiffed in these situations. Also how can OP pay off one debt and not pay off the others, what have the other creditors done to deserve this unfair treatment ?

Due to the bankruptcy they have taken me off of the account and made the second party liable, instead of clearing the account the same way they have done with all of the other creditors.

Jon_P_W

molerat wrote: »

That is the problem with joint and several liability on an account, one person usually ends up getting stiffed in these situations. Also how can OP pay off one debt and not pay off the others, what have the other creditors done to deserve this unfair treatment ?

I'm going to do my best to make sure that the other party gets as minimally "stiffed" as possible.

Jon_P_W

I've now requested statements from the time that the debt was created. Do you think that with proof that I amassed the debt it can be included in the bankruptcy instead of palmed off onto the other party?

Flyright

No, the law of joint and several liability is clear, a joint debt passes to the other party if one party goes bankrupt.

TheGardener

Sorry if I'm being slow but: Did the OP have a joint account and run up the debt on that account - i.e. big overdraft?

or - did the OP take out a loan (in their own name) and make the payments from the joint account?

There is clearly a difference - a joint account debt (overdraft) is jointly and severally liable but a loan taken out in the OP's name only and the payments made from a joint account are not jointly and severally liable...

So a big overdraft is the friends problem but a loan in the OP's name only isn't the friends problem.

If the payments to the loan is what built up an overdraft to the joint account - then this is still the friends problem and the money is owed to the bank - not the BR's loan provider which is now part of the BR.