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Splitting up with a joint account? Beware the debt trap

View profile for Sally Ward
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When couples break up either one can be 100% liable for money owed on a joint account

After Jennifer Davis (not her real name) tried to shut down the joint account she shared with her former partner, she got a nasty surprise. Her other half had taken out £2,500 without her knowledge before they had split up, and the bank demanded repayment before allowing the account to be closed, saying that both of them were liable for the debt.

Her experience illustrates a persistent problem in contentious relationship breakdowns.

Martyn James, of complaints website Resolver, says: “When you take out a joint account with a partner, you’re signing up for a range of responsibilities.

What many people don’t realise is, if the relationship ends, the lender or credit provider can pursue either party for 100% of any debt, rather than the 50% that many assume they’ll be liable for.

 And if you’ve set up an account that’s in credit that isn’t ‘two to sign’, your ex can waltz off with the full balance if you’re not quick enough to freeze the account."

If you are going through a break-up you need to tell creditors as soon as possible and they should act to ‘freeze’ the account. Regular payments, wages, other money that goes in will be frozen until you and your partner have agreed what to do about the debt, so you will need to make arrangements for them to go through an account in your sole name.

The account really is frozen, so only pre-authorised payments will be allowed.

Banks or creditors will not get involved in any dispute as to which partner is responsible; they will only pursue you for debts.

Our family lawyers have many years experience in advising clients on all the financial aspects of a divorce. We work hard to ensure our clients get what they are entitled to.

For a free initial consultation please telephone on 01245 228106 or email Family@gepp.co.uk

This is not legal advice; it is intended to provide information of general interest about current legal issues.