Joint Debt

Key Highlights

• Joint debt, also known as co-borrowing or co-signing, is a debt incurred by two or more individuals jointly with the understanding that each of them will be responsible for repaying all amounts due.

• Common types of joint debt includes mortgages taken in joint names, joint bank accounts with overdraft facilities, personal loans applied for together, utility bills in both names, rent arrears for jointly signed tenancies and council tax or water charges at a shared property.

What is Joint Debt?

Joint debt, also known as co-borrowing or co-signing, is a debt incurred by two or more individuals jointly with the understanding that each of them will be responsible for repaying all amounts due. Joint debt requires every co-borrower to accept responsibility for fulfilling the terms of a loan agreement regardless of who actually uses the money.

Common Types of Joint Debt

You might be sharing debt in ways you didn’t realise. Some common examples include:

• Mortgages taken in joint names

• Joint bank accounts with overdraft facilities

• Personal loans applied for together

• Utility bills (like electricity or gas) in both names

• Rent arrears for jointly signed tenancies

• Council tax or water charges at a shared property

Important Legal & Financial Implications

If your name’s on it, you’re liable. Even if the other person used the money, you’re still responsible.

• Bankruptcy: If the other person declares bankruptcy, you still owe the full debt.

• Death: If one person dies, the other becomes responsible for repaying everything.

What Are the Risks?

• Credit impact: Your credit files get linked. If one misses a payment, both credit scores can take a hit.

• Disputes: Life happens - divorces, breakups, even death. And that can leave one person with the full financial burden.

How to Protect Yourself?

• Only share debt with someone you fully trust.

• Talk openly about money and responsibilities.

• Make a budget together to stay on top of repayments.

• Keep some of your finances separate to reduce risk.

• Early guidance can ease the stress - seek help from a debt advisor if you’re falling behind.