How to deal with problem debt after separation

Money Advice Service

You may have debts with your ex-partner, or you may owe money in your own name. Money might be tight while you sort out your finances after you separate, but don’t ignore debt problems. The sooner you deal with them, the easier it will be.

Working out which debts to pay first

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If you don’t have enough money to keep up payments on your loans, credit cards, bills or housing costs like mortgage or rent, it’s important to prioritise which you can pay. The debts that you should pay first include your rent or mortgage, rates or Council Tax and gas and electricity bills.

The reason you should pay these so-called ‘priority’ debts first is that if you don’t, the consequences could be serious. You could be taken to court or lose your home.

Read more in our guide How to prioritise your debts.

Sorting out loans and credit card debt

Once you’ve arranged to pay your priority debts, you should work out how much you can pay towards your other debts, such as money you owe on your credit or store cards, on bank loans or hire purchase and catalogue debt.

Use our Budget planner to work out what you can afford to repay.

Contact the lender and tell them what you can pay. If you prefer, you can get free advice from a debt advice charity. They may be able to ask the companies to freeze the interest while you work out a repayment plan, but there’s no guarantee this will happen.

Use our locator tool to find out how to get free debt advice online, over the phone or face to face.

Joint debts – what should you do?

With any joint debts you have, such as a joint bank loan, overdraft or mortgage, you are usually both liable to repay the whole amount.

That means if your ex-partner doesn’t want to pay their share, the bank or building society might ask you to make all the payments. Contact them to tell them you’ve split up and see if you can:

  • put some restrictions on the account so your ex can’t run up further debts, or
  • reach an agreement so they accept lower payments if you can’t repay in full.
Find out more about Protecting against financial abuse in our guide.

Making an arrangement with your ex-partner

If you have a joint loan or mortgage with your ex-partner and the bank won’t let you separate the loan, you should try and agree with your ex how you will repay it.

Because both of you are liable to pay off any joint loans you have, it could affect both your credit ratings and your ability to borrow in the future if one or both of you doesn’t keep up the payments. You might want to:

  • agree with your ex-partner that you will continue to make payments from a joint account
  • sort out an arrangement so one of you agrees to pay the bank or loan company but receives a contribution from the other. If you go for this option, try and agree to set up a standing order for the payments to or from your ex-partner. That way you know they’ll be made regularly
  • pay off your joint loan and take out another one in one of your names. This is only likely to work for you only if the partner taking out the loan in their name has a good credit rating and can afford to make the repayments.

There’s more information about credit rating in How your credit score affects the cost of borrowing.

What to do if your ex-partner won’t co-operate

Sometimes, couples who are splitting up make arrangements for their finances with the best of intentions, but they just don’t last.

It could be because you or your ex-partner’s financial position changes, for example if one of you loses your job, or because your breakup becomes much more heated.

If that’s the case, try and keep the bank or lender informed. If you don’t think the bank or lender are dealing with you fairly, you can complain to the Financial Ombudsman Service.

Your next step

This article is provided by the Money Advice Service.

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