Financial worries and debts can be a major factor in the breakdown of a relationship. For others these worries arise as a consequence of the split. Either way, financial worries over debts are common at the time of separation when all the finances are up in the air. It may not be clear who is responsible for what debts, especially if some are joint debts. It’s important not to panic but you can’t ignore them either.
The first step in tackling a debt problem is to make a list of all the people and companies you owe money to (your creditors). You are responsible for any bills or debts that are in your name, even if you have not spent the money. You are also responsible for debts that are in joint names. If you ex-partner refuses to pay a joint debt, you may be asked to repay all of it. You should not be responsible for debts that are solely in your ex-partner’s name.
The next step is to work out your budget. This can be particularly hard when you’re in the process of separating as your accommodation costs may be about to change and all the income that went into supporting one household now has to be shared between two. It is a good idea to be working with a family mediator or solicitor alongside this to make sure that any financial decisions you make around the ending of the relationship fits in with the debt advice and vice versa.
Once you have a list of the debts, the amounts outstanding and you have done a budget you can get free, confidential debt advice from organisations like the Citizens Advice Bureau ( CAB) and National Debtline. They will help you to identify what your ‘priority’ debts are. These are the debts that need to be dealt with first because the consequences of not paying these debts can be more serious than for other debts. They include, mortgage or rent arrears, fuel arrears, council tax arrears, court fines, maintenance and tax. If something is classed as a ‘non-priority debt’ it doesn’t mean you can ignore it. Unless you make offers to pay, or explain why you can’t pay, your creditors may take you to court.
Follow this link for further information on what to expect after a separation