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Before you start negotiating with your creditors (the people you owe money to), check that you are liable for your debts. Sometimes people wrongly assume that they have to pay a bill that is in the name of a partner, or that they are responsible because they are relatives of someone who has died. Find out more about some common problems.

If you need advice on debt-related issues, find out where to get advice. 

Are you liable for the debt?

You will usually be liable for a debt if you signed an agreement – for example, for a credit card or loan, mobile phone contract, or gas supply. You may also be liable to pay if you agreed to guarantee someone else’s loan (see below). However, it is always worth checking if you are, or should be held responsible for a debt.  

Are you responsible for your partner’s debts?

Don’t assume that because you are married or in a civil partnership that you are always both responsible for each other’s debts:

• If only one of you signed a credit card agreement, the debt doesn’t belong to the other person, even if they are an additional card holder and have helped to build up the debt.
• If you both signed a credit agreement, you will be jointly and severally liable – this means you are both responsible for the full amount.
• You can both be held jointly and severally liable for a council tax bill for the place you live, even if the bill is in one name only.

What happens to debts when someone dies?

Most often, if you alone sign a credit agreement, responsibility for the debt is yours and yours alone. 

• If you die and leave behind assets, your creditors may be able to recover their money by making a claim against your estate. The person dealing with your estate may need to seek legal advice. Your creditors are not entitled to pursue your family members for payment from their own funds. 
• If you die leaving no assets, the debt will not be recoverable - family members should send a copy of the death certificate to your creditors.

What are your responsibilities if you agree to be a guarantor?

If you agree to be a guarantor for someone else’s debt, you can be held liable for it if they fail to pay. Always look carefully at the agreement you are thinking of signing and get advice if you are not sure what it covers. 

Are you responsible for old debts?

You are responsible for old debts, but there are time limits for your creditors to take court action for debts such as credit cards, personal loans, store cards, catalogues, overdrafts, water, fuel, rent and council tax. After a long period of time, your creditors or lenders will no longer be able to recover the debts through the courts. This is called being ‘statute barred’. 

The debts listed above usually become statute barred if during at least the last six years: 

• you haven’t made any payment towards the debt,
• you haven’t written to the creditor admitting that you owe the money, and
• your creditor hasn’t pursued the debt through the county court.

Mortgage lenders have 12 years to try to recover a mortgage shortfall from you through the courts, and six years to recover interest owing. Recovery of some debts is not statute barred: examples are tax debts, benefits overpayments and social fund loans. 

If the debt is statute barred, your creditor will not be able to obtain a county court judgement for the debt. However, the creditor can still pursue the debt in other ways, such as using a debt collection agency or sending threatening letters, but the way that they try to recover the debt has to be fair. 

The Office of Fair Trading has published guidance on the fair recovery of debt. Its advice on statute barred debts is that, while it accepts the debt exists: 

• it is unfair to pursue you for the debt if you have heard nothing from your creditor during the relevant limitation period 
• if your creditor has been in regular contact with you before the debt became statute barred, it is fair for them to continue to attempt to recover the debt
• it is unfair for your creditors to mislead you about your rights and obligations – for example, falsely stating or implying that the debt is still legally recoverable if it is not
• if you state that you will not be paying a debt because it is statute barred, continuing to pursue you for payment could amount to harassment
• If you need to complain about the way a creditor is trying to collect an old debt, you can complain to your local trading standards department. Consumer Direct can help you find yours. 

If you were pressurised into a loan or didn’t know what you were signing

In some circumstances you may need to challenge if you should really be held responsible for a loan. This may be the case, for example, if you were:  

• put under pressure by another person (eg by a partner) to sign a loan agreement against your wishes, or
• misled by a lender when they persuaded you to take on a loan (eg they told you your home wouldn’t be affected and you agreed to a secured loan).

Complex legal questions can arise in situations like these and you may need to seek specialist legal advice. 

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