How to deal with problem debt after separation

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

Working out which debts to pay first

If you don’t have enough money to keep up payments on your loans, credit cards, bills or housing costs (for example, mortgage or rent) it’s important to prioritise them.

The debts that you need to pay first include your:

  • rent or mortgage
  • rates or Council Tax, and
  • gas and electricity bills.

This is because these are ‘priority’ debts – which means if you don’t pay them first, the consequences could be serious. You could be taken to court or lose your home.

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Sorting out loans and credit card debt

When you’ve arranged to pay your priority debts, you need to work out how much you can pay towards your other debts. These could include money you owe on your:

  • credit or store cards
  • bank loans
  • hire purchase and catalogue debt.

To help you work out what you can afford to pay, try our free and easy-to-use Budget Planner.

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

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Joint debts – what should you do?

With any joint debts you have – for example, a joint bank loan, overdraft or mortgage – you’re usually both liable to repay the whole amount.

That means if your ex-partner doesn’t 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-partner can’t run up further debts, or
  • reach an agreement so they accept lower payments if you can’t repay in full.
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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 – try to agree between you how you’ll repay it.

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

  • agree with your ex-partner that you’ll 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 if the partner taking out the loan in their name has a good credit rating and can afford to make the repayments.
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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 one of you has a change in financial circumstances, or if communication breaks down.

If that’s the case, try to keep the bank or lender informed. If you don’t think you’re being treated fairly by your bank or lender you can complain.

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MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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Looking for us? Now, we’re MoneyHelper

MoneyHelper is the new, easy way to get clear, free,
impartial help for all your money and pension choices.
Whatever your circumstances or plans, move forward with MoneyHelper.

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