A significant number of people who have broken up with their former partner are left with joint debts that could be causing them serious financial dif…
A significant number of people who have broken up with their former partner are left with joint debts that could be causing them serious financial difficulties, new research has shown.
According to a new survey conducted by the Debt Advisory Centre, more than one-fifth (22 per cent) of recently separated couples have loans and credit cards in both their names and this can create further friction between the pair if one party is not pulling their weight in terms of repayments.
The research showed that during the last year, one in eight couples in the UK went their separate ways.
However, prior to these breakups, couples had been building their lives together and this undoubtedly led to many taking out joint borrowings, with one-third (37 per cent) of former couples having a mortgage in both their names, while one in five (19 per cent) shared a tenancy agreement.
Meanwhile, 15 per cent of respondents also stated there had a joint bank account, while one in ten (9.7 per cent) held shared assets, like a car, white goods or other high-value items.
Overall, just 36 per cent of ex couples were able to split up without having this change in their circumstances impact their finances.
Men were shown to be more likely to have shared financial assets with a former partner than women (74 per cent compared to 50 per cent respectively – while, perhaps surprisingly, younger people (aged 25 to 34) were the most likely to hold shared financial assets after a breakup.
Spokesperson for the Debt Advisory Centre Ian Williams commented: "Splitting up with your partner is hard at the best of times, but when you share financial assets like unsecured debts, a mortgage or tenancy agreement, it can make things much more complicated.
"Separating your accounts can take time, but it's important you make this a priority when the relationship has come to an end. If a separation has left you struggling with debt repayments you can't manage alone, it might be time to seek professional debt advice."
The implications of failing to address the issue of shared financial assets and debts after a breakup can be far-reaching for many people, so making sure these issues are swiftly dealt with should be a priority.
Furthermore, the body has also published research showing the significant amount of money that is being lent by individuals to family members, as well as the serious financial implications this can have if these loans are not repaid.
The study showed one-third of all Britons have lent money to family members in the last year, with a combined £1.6 billion borrowed. The average amount lent stood at £100, although in one in ten cases, this figure rose to more than £200.
Furthermore, for 40 per cent of people this money was not viewed as a loan at all, as they do not expect it to be repaid.
Mr Williams stated: "Putting your hand in your pocket to help out a family member is very common across the UK. What is less common is actually seeing the loan repaid."
He added many people find it extremely difficult to broach the subject of unpaid debts when it is a member of their own family that owes them money. As a result, individuals can find themselves falling into their own set of financial difficulties due to their generosity.
In order to avoid this state of affairs, Mr Williams suggested drawing up a contract and setting out clearly the expected timescale for repayment is one of the best ways to ensure family loans are paid back in a manner that is flexible and fair for all involved.
However, if people are finding they are seeking loans on a regular basis, this could be a sign they need to carefully consider their present monetary situation and perhaps seek the advice of a qualified professional to help them get their finances back on an even keel.
Posted by James Francis