Am I liable for my Spouse’s debts if we are separated?

When separating, financial responsibilities and liabilities can become a significant concern, especially where there is some doubt as to what the funds were used for.

The general position with spouse debts

• Joint Debts: If both spouses have signed for credit or a loan, they are jointly liable, usually on a “jointly and severally” basis. This means each party is responsible for the entire debt, not just a portion, and creditors can pursue either or both parties for repayment, regardless of who incurred the debt.
• Individual Debts: If the debts are in your spouse’s name only, you are generally not liable for them. However, debts incurred by one spouse may still impact the other, especially if they were taken out for the benefit of the family or if the other spouse has acted as a guarantor.
• Court Consideration: The court will consider both parties’ debts when dividing assets. Even if a debt is in one spouse’s name, it may be treated as a joint responsibility if it was used for family purposes. During divorce proceedings, the court will consider the entire financial situation of both parties, including all assets and liabilities, to achieve a fair settlement. This may involve one party taking on more of the debt or receiving more of the assets.
• Financial Settlement: It is crucial to address debts in a financial settlement during divorce proceedings. Without a financial order, both parties remain responsible for joint debts, and creditors can pursue either party.
• Bank’s Position: The bank or creditor is not bound by the terms of the financial settlement. Even if a court orders one party to pay off a debt, the creditor can still pursue the other party if the debt is not paid.

To ensure financial certainty and protection, it is recommended to resolve all financial matters and have a financial order approved by the court before finalising the divorce.

Protecting Yourself

• Credit Reports: Regularly check your credit report to ensure no unexpected debts appear in your name.
• Legal Advice: Seek legal advice to understand your rights and obligations regarding debts during separation.
• Communication: Maintain open communication with your spouse about financial matters to avoid misunderstandings and ensure transparency.
• Full financial disclosure: if you and your spouse are transparent with one another as to the assets and liabilities that you have then you should be entirely aware of the situation. It would be good practice at separation to enter into an exchange of voluntary disclosure as this would be ultimately ordered by a court.

When engaging in a voluntary exchange of financial disclosure, the following documents are typically expected:

1. 1. Valuation of the family home and any other properties
   2. Mortgage statements
   3. Details of any other significant assets (e.g., vehicles, jewellery)
   4. Statements for all bank accounts (last 12 months)
   5. Statements for savings accounts, stocks, shares and other investments
   6. Pension statements
   7. Recent payslips (last 3-6 months)
   8. Latest P60 form
   9. Tax returns (last 2-3 years)
   10. Credit card statements
   11. Loan agreements and statements
   12. Monthly expenses

 How can we help

In summary, whether you are liable for your spouse’s debt during separation depends on the nature of the debt and any legal agreements in place. It’s crucial to seek legal advice to protect your financial interests, ensure clarity in your financial responsibilities and understand how you can obtain a legally binding order.

We can explain to you the benefits of obtaining; separation agreements, consent orders or court orders all of which would make it clear who will be responsible for each debt.

For tailored advice and support regarding your specific situation, please contact us to book an appointment. Our team is here to provide guidance and help you navigate the complexities of financial liabilities during separation.

Article dated:  30.04.2025

Roxanne Woolliams Associate Family Law Solicitor

Roxanne is an Associate Family Law Solicitor.  She works on a vast and varied caseload covering most areas of Family Law.  She specialises in Matrimonial Finances including complex and high value matters.  Roxanne also covers matters involving children, from child arrangements to the more complex matters such as child abduction.

Roxanne has a very personable approach and feels it is imperative to achieve the best possible result for her clients.  Roxanne understands the significance of guiding her clients through what is an extremely difficult and emotional time with compassion, whilst providing the best advice.