Stage 2: Work out if you are liable to pay the debts
Find out if you are liable for other people's debts, whether your debts are covered by insurance and how to deal with loan sharks.
Am I responsible for my partner’s debts?
Generally speaking, you are not liable for your partner’s debts. The exceptions, where you and your partner are both liable are:
- Rent on a joint tenancy
- Loans in joint names where you each signed the agreement
- Overdrafts on joint bank accounts
- Council Tax for when you lived together
- Water bills for when you lived together.
In each of these cases each of you is liable for the whole debt.
Otherwise, where a debt is in your partner’s name only and you did not act as guarantor (so you did not sign the agreement) you are not liable. If the debt is rent, mortgage or a loan secured on your home, you may wish to pay anyway so that you can stay in your home.
Am I liable for another person’s debts?
Other than partners, you are not liable for another person’s debts unless you signed the agreement, either because the debt is in joint names or because you acted as guarantor.
What happens when someone dies?
When someone dies, their debts are paid from any estate (assets) they leave. If their home is jointly owned with a partner, it is not usually part of the estate. Go to the link below for more information. Once there is nothing left in the estate, any remaining debts “die with the debtor" except for:
- Debts in joint names or guaranteed by someone else
- Debts for which a partner is jointly liable
- Mortgages, but mortgages on family homes are usually covered by insurance.
Get more information on what happens when someone dies on the gov.uk website
If you are arranging a funeral and on a low income you may be able to get a Funeral Payment from the DWP.
Find out more on Funeral Payments and if you are eligible on the gov.uk website.
Is there a time limit for collecting debts?
If you have not had contact with a creditor for six years (12 years for a mortgage or mortgage shortfall), nobody has made payments to the debt and there is no county court judgment on it, it may be too late for the creditor to start court action.
Get more information on time limits for collecting debts on the National Debtline website
What if I have borrowed from a loan shark?
A loan shark is an illegal money lender, who does not have the required licence to lend money. Loan sharks charge high rates of interest and sometimes use threats of violence against people to get them to pay.
If you have borrowed from a loan shark, you have not committed a crime – they have and they could go to prison. You do not even have a legal obligation to pay them back.