Am I liable for my partner's debts?

If two people jointly enter into a credit agreement, they are both liable for the whole amount of the debt. This is known as 'joint and several liability'. For an agreement to be joint and several, it must be signed by all parties in the form required by the Consumer Credit Act. So, if you have not signed such an agreement, you are not liable for your partner's debts.

However, joint and several liability can also apply to rent arrears on joint tenancies, or arrears on joint mortgages, to council tax payments for couples and to water/sewerage charges on properties which are jointly occupied. You need to talk to the individual creditor to obtain a clear understanding of the liability for the debt.

If I die does the debt die with me?

Any debts become the liability of your estate. If there were sufficient assets in your estate to settle your debts then this would be done by the executors. Creditors may sometimes attempt to claim payment from a partner or relative of the deceased, particularly if they lived with them, but if the estate cannot settle the debts, partners or relatives are not obliged to do so.

There are several possible exceptions to this rule:

1. Debts for which someone had joint and several liability with the deceased.

2. A mortgage remains on a property even if this passes to a new owner by inheritance (although it may be paid off by an insurance policy at death).

3. Taking over tenancy from the deceased by succession, which may involve taking over rent arrears if these cannot be paid by the estate. A tenant by succession can lose their home if the arrears are not paid.

4. For married couples, there is joint liability for rates. In the event of a spouse's death, the surviving partner will become liable for payment of rates but not for any arrears owed by the deceased spouse.

It is always worth checking to see if there is payment protection or other insurance in place to clear the debts on death.

What should I do if I receive notification of a judgment from the enforcements office?

The steps which a creditor must take to have a debt enforced are as follows:

1. Notice of intent to enforce a money judgment

2. Application to enforce a money judgment

3. Issuing a custody warrant

4. Examination of means of debtor

5. Report of examination issued to creditor

6. Enforcement decision made by Enforcement of Judgments Office (EJO)

7. Enforcement decision issued to the creditor

(This is a basic summary and debts can be dealt with in a slightly different manner in some circumstances).

Notice of intent to enforce a money judgment -

This proves that you legally owe the money. The notice gives you 10 days to comply with the terms of the judgment. At this stage there still remains the opportunity for you to come to some sort of arrangement with the creditor.

Application to enforce a money judgment -

An application to enforce a money judgment has to be lodged within 3 months of the date of issue of the notice of intent, unless the creditor obtains an extension of time from the Chief Enforcement Officer.

Issuing a custody warrant -

When the EJO has accepted an application for enforcement, a custody warrant is issued and served to the debtor. As a result, your possessions with the exception of bedding and goods used in the ordinary course of your business, are deemed to be in the custody and possession of the EJO. This is usually delivered by post, however, sometimes a member of the EJO may visit your home and compile a list of the items which are subject to the custody warrant. The items listed are not removed from the property and in most cases are not seized. If your goods are subject to a custody warrant you must not interfere with or dispose of them - such removal is an offence.

Examination of means -

After the service of a custody warrant, the EJO will conduct an investigation into the debtors financial circumstances. In practice, information is acquired through an interview by an enforcement officer and / or the serving of a summons requiring you to attend for an examination of means. These hearings are held in Bedford Street in Belfast or at centres in Armagh, Ballymena, Londonderry, Enniskillen and Omagh. It is important to attend this hearing and failure to attend without a reasonable excuse can lead to you being arrested and taken directly to the EJO.

The hearing is conducted in private and is very formal. The purpose of the hearing is to allow the EJO to compile a report on your financial circumstances. You may bring a lay representative or a solicitor to the hearing.

The report or notes of evidence of the enforcement -

The report is sent to the creditor who can then further assess the chances of recovering the debt.

Enforcement decision made by the EJO and issued to the creditor

The EJO uses its discretion as to which methods to use, taking the individual's financial circumstances into consideration.

What effect will a judgment have on my ability to obtain credit?

Judgments are recorded on the Credit Reference Files maintained by Credit Reference Agencies. The entry on your file may affect your ability to obtain further credit as most lenders check these files to help them decide whether or not to grant credit. Creditors record only factual information on individuals such as missed or reduced payments and the general 'blacklisting' of families or addresses is a misconception.

How can I find out what is on my credit file?

You can obtain a copy of your credit file by contacting one of the credit reference bureaux direct. There is a small fee for this information. Click on any of the links below to obtain more information.

www.uk.experian.com

www.equifax.co.uk

www.callcredit.plc.uk

What happens if I fail to make payments under an Instalment Order?

If you do not make payments under an instalment order, the EJO will issue a default payment letter asking you to update the arrears. If you fail to do so they will inform your creditors who will go back to the High Court where committal proceedings can be taken. If your circumstances change and you cannot maintain the terms of the order you should contact the EJO immediately, to reassess your means to pay.

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