61% of UK adults do not understand rules on joint debts

Nearly two-thirds of UK adults do not understand the rules in terms of who is responsible for debts on joint accounts.

This is according to researc…

Nearly two-thirds of UK adults do not understand the rules in terms of who is responsible for debts on joint accounts.

This is according to research by SavvyWoman – carried out by Opinium Research – which discovered that 61 per cent of people did not realise that either partner on a joint loan is responsible for the whole debt.

Some 31 per cent thought that if a couple split up and there is a joint loan – such as a mortgage – they would each be liable to pay half the loan, 24 per cent said they did not know who would be responsible and six per cent mistakenly think it is the responsibility of whoever made the purchase.

This means that both people could be left needing a debt solution if they are unable to meet the repayment schedule agreed when they were still together. If this is the case, then individuals need to be proactive to make sure their financial situation does not spiral out of control.

The Financial Ombudsman Service has revealed that throughout 2012 there was an increase in queries regarding the status of debts on joint accounts and it said it would expect lenders to treat consumers fairly and sympathetically if they are experiencing genuine financial hardship.

SavvyWoman pointed out that "different banks have different approaches when it comes to joint accounts", so in some cases, one party "may be able to freeze a joint account, but both will have to sign a document to unfreeze it".

According to the resource, the best advice is to make sure joint accounts are closed after a relationship breaks down and all direct debits are changed accordingly. This way, people should not find themselves in the situation whereby they are paying more money than they think they should.

Individuals should also try and reach an agreement with their ex about how any debt will be repaid.

By James Francis

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