Dealing with debt

Debt is a worry when partners are together and can become a crisis on separation. Most people have debt in their lives, maybe a mortgage, bank loan, credit and store cards.

The crucial thing to remember about debt is that the people you owe money to likely to respond more compassionately if you keep them informed of your situation. Do let them know if you can’t pay, or can’t pay the full amount. Most lenders are willing to negotiate terms and are more likely to agree to something that works for you if you talk to them.

Different kinds of debt are dealt with differently – both when you separate and if you can’t afford to pay. Mortgage or rent arrears are the most important. You need to keep a roof over your own and your children’s heads. With mortgages there are often options to increase affordability, for example to extend the term to reduce payments, or transfer to interest only either in the short or long term, or to take a mortgage holiday. With rent there may be options to access housing benefit (see Welfare Benefits section), or to move to different accommodation.

When couples separate some debts are in joint names and others are in the name of one or other partner. Essentially if a debt is in your name you are responsible for settling it even though you may both have had the benefit of the money. If a debt is in joint names then you are both responsible for settling it. Where debts are incurred after separation this still applies so it is important to think about closing or freezing joint accounts when you separate while you decide what to do next. The main exception to this is if one person doesn’t pay utility bills (gas, electricity and council tax) after the other person has left the property, they will remain the responsibility of the person living in the home from the time of separation.

Getting help

If you have lots of debts then it is good to seek specialist advice on how to deal with it. You can go to your local Citizen's Advice Bureau for help with this, or you can find help on the internet by visiting The National Debtline.  Both of these offer free, impartial and confidential advice and guidance.

If you feel you need help with your debts, it is a good idea to seek specialist advice. StepChange Debt Charity helps over 500,000 people each year overcome their debt problems and get their lives back on track.

Their online debt advice tool Debt Remedy can help you put together a personal action plan to help you take the first steps out of debt. Alternatively you can call their Helpline on 0800 138 1111 (free, including from mobiles).

Mediation offers separating partners a place to sort out accommodation for everyone involved and to agree a fair way to deal with any debts whether they are in joint or individual names.

National Family Mediation (NFM) is a network of professional family mediation providers based in England and Wales that work with families affected by relational breakdown. All providers aim to help clients achieve an outcome that works best for them and their family.

National Family Mediation (NFM) services charge £25-£100 for a MIAM, depending on geographical locality, which may include the fee for the completed FM1 form. Meetings usually last for 45 minutes – 1 hour. This includes the means assessment to check whether you will be eligible for Legal Aid, determining whether your mediation will be free or not. Mediation sessions which follow the initial MIAM are charged at a sliding scale according to income, but start at around £80 per session, and usually last up to 1½ hours.

If you would like to get more information about mediation and/or make an appointment you can contact NFM direct on 0300 4000 636 or you can contact a NFM family mediation provider in your area.

All services also take referrals from Solicitors, the court or other helping / support agencies.

 

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