Debt and the cost of breaking up

Ending a relationship is hard enough, but money worries can add even more strain.

People can have many financial worries when ending a relationship, even if they don’t have debt problems. Credit ratings, joint assets and even their ability to get a future mortgage or rental property can all be concerns after breaking up with a partner.

However, are unhappy couples staying together because of financial hardship?

The Daily Mail published an article recently that highlighted the differences between divorce rates in and out of the recession.

One of the comments on this article sparked our interest further. The commenter suggested the opposite of the main article: married couples were staying together longer because they couldn’t afford to get divorced. They were too mired in problem debt to survive financially if their relationship finished.

Joint debt after divorce

We’ve written a lot of articles about joint debt and debt and relationships. One of our most read is We’ve got a joint loan – now we’ve split who has to pay? Debt advice experts agree it’s a question the industry gets asked a lot.

This article’s very popular, is visited from Google searches constantly, and gets shared a lot on social media. It explains the law around joint debts (an area with a lot of confusion), it explains about joint and several liabilities, and details how debts are dealt with when you split up. It often surprises couples when they realise who is responsible for which debts (usually it’s both of them), and what can happen if these responsibilities aren’t met.

We often come across cases where a relationship has ended and one partner decides to petition for bankruptcy to deal with joint debts incurred during the failed relationship. In many such instances, the ex-partner not entering bankruptcy is shocked to discover that they will be fully responsible for the repayment of the total joint debt outstanding. This can often put solvent ex-partners into debt difficulties.

Debt, relationships and the recession

It’s clear to see that the credit crunch and subsequent recessions have affected people’s behaviours in lots of ways and we wouldn’t be surprised if squeezed incomes or debt worries meant that some couples stayed together for nothing other than financial reasons.

Being stuck in an unhappy relationship is one thing, but to leave a relationship and face up to not only the cost of a divorce but the fact that you’re now unable to pay off your debt on a sole income might be too much for some people to take. This is especially complicated if children are involved.

If you have a joint debt problem

We always say that taking action early is the key.

• Identify which debts you are liable for.
• Explain the situation to your lenders.
• Seek free debt advice.

Charities like Divorce Aid are well placed to offer advice on divorce, the costs and the legal implications of splitting up. We can help with free and impartial debt advice; this includes putting a personal action plan in place through our online debt advice tool StepChange Debt Remedy.

In a recent survey 88% of our clients said their family life was better after they contacted us. So while relationships can suffer because of debt, seeking free debt help can often ease the strain.

Do you know someone stuck in a bad relationship because they’re worried about their financial position? Let us know in the Comments box below.

More on debt and divorce

Where to get free debt advice

Divorce: Your rights to your money

How a divorce affects your mortgage

Why getting divorced will damage your retirement income