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Debt- in my name but benefitting us both, AIBU? Any advice.

(35 Posts)
Iwishihadamoneytree Thu 08-Feb-18 19:47:29

Namechanged for this so not linked to other posts, others are aware I'm posting this.

We need a loan. We can afford the repayments, the apr is reasonable. We have a small loan now, the plan is to "top up" this loan as this is the most affordable way to do it.

However, and here is my problem, the current loan is in my name. I could just about afford this alone if I needed to. The top up loan will still be in my sole name but I could not afford the repayments alone. I have no intention of divorcing my husband and, as far as anyone can be, I'm sure he's not planning on divorcing me. But nevertheless people do divorce and I don't want to be left with a loan I cannot pay.

DH credit rating is not as good as mine so there is not the option of him taking a loan. I cannot add his name to the loan either- I've checked, it's a personal loan and so this is not possible. We are renting currently so no joint mortgage to secure a joint loan against.

From what I can gather, in the event we did divorce, I would be liable for this debt solely. I could argue it was accrued during the marriage and we both benefitted from it and then he would likely be ordered to pay towards it but I'm not sure if this is certain.

DH hasn't said as much, but I can tell he is a bit upset that I'm considering this and that our only option is the loan in my name. I think he's hurt that I'm considering what if we divorced and that I don't want to be in the position of trusting he would do the right thing and pay the loan in the event of divorce- I do trust him, however I've seen a friend badly burnt by not financially protecting herself.

I'm wondering if there is anything a solicitor can draw up to say we are both liable for this debt before I commit to it? Would it be worth the paper it was written on? Has anyone got any advice or experience of this?
Aibu to consider taking this debt at all (I can't see an alternative).

Thank you

JaneEyre70 Thu 08-Feb-18 19:50:58

Never borrow money you can't afford to pay back. Your DH doesn't really get a say when he can't borrow it on his credit rating, let's be honest. Go and talk to a debt specialist so you can try and find ways to improve your financial position without accruing more debt.

Whatshallidonowpeople Thu 08-Feb-18 19:54:00

Whoever told you that you'd be solely liable for debts if they are in your name doesn't know what they are talking about

TempusEejit Thu 08-Feb-18 19:55:53

Roughly how much do you need to borrow and over what period of time would you be paying it back?

SlipperyLizard Thu 08-Feb-18 19:56:09

All our debt except the mortgage is in my name, simply because I organise the household finances. It helps that I’m also the main earner, so would probably be saddled with them if we did divorce (no plans to!).

My understanding is that debts that benefitted both of you will be taken into account in a divorce settlement and this link confirms that:

www.familylawgroup.co.uk/site/blog/flg-news/dealing-with-debt-on-separation-or-divorce

So I would suggest making sure you discreetly keep some evidence of what the loan is used for, just in case.

SirWibbles209 Thu 08-Feb-18 19:56:42

Hmm I work in this industry, he couldn't be forced to pay back the debt in event of divorce as it's in your sole name. The only way he could be liable is if it was a joint debt/ he was added to loan

teaandtoast Thu 08-Feb-18 19:57:08

I wouldn't do it. It wouldn't be worth the risk to me.

SirWibbles209 Thu 08-Feb-18 19:57:52

I mean in the event of a divorce he may be able to, if you had evidence. But I would say it's risky

Whatshallidonowpeople Thu 08-Feb-18 19:58:02

Sirwibbles, you are talking rubbish. All debts and assets would be taken into consideration

SirWibbles209 Thu 08-Feb-18 19:58:25

Maybe seek legal advice first? Try civil legal advice

TempusEejit Thu 08-Feb-18 19:59:16

AFAIK the divorce courts could order that they're jointly responsible for the debt but they can't order the loan provider to not hold the OP solely responsible i.e. they'd just come after her and it'd be her responsibility to chase up any missed payments from her ex.

teaandtoast Thu 08-Feb-18 20:00:13

How about DH joining your local credit union? The one in my town allows you to take out a loan after 3 months, I think.
Also more relaxed on who can have a loan.

Urubu Thu 08-Feb-18 20:01:10

Depends on your relationship with your DH and the amount...
I would do it, but I trust that even in the event of a divorce DH would be fair and honest. Similarly all our savings are cirrently under my name just because I did setup the account initially but in my mind it is shared money and I would give DH half if we divorced.

SirWibbles209 Thu 08-Feb-18 20:01:15

Er with all due respect whatshouldidonow no I'm not, it depends what the loan was taken out for, and if there is evidence to back it up. Home improvements etc probably seen as a joint responsibility but again depends what the loan is for.

lalalalyra Thu 08-Feb-18 20:03:25

Can I be really morbid - where would you be left if anything happened to him if the debt was all in your name?

It's not just divorce you need to think about. My relative's widow can't even get EE to cancel one phone contract even though they can see that he has two on his account and he has explained that his wife died therefore hers is no longer needed.

TruJay Thu 08-Feb-18 20:04:07

Could you not get a new joint loan including enough money to pay off your current personal loan? Then be left with just the new joint loan

QuiteLikely5 Thu 08-Feb-18 20:15:58

How much is this loan? Tbh I’d be highly offended if I was your husband!

Allthewaves Thu 08-Feb-18 20:39:21

How much is the loan? Iv always had our debt in my name as dh credit rating was the pits but I also had both our cars registered in my name and myself as the registered keeper. Asset to offset the debt

Allthewaves Thu 08-Feb-18 20:43:56

Apply for a joint personal loan? and leave other loan as it is.

Iwishihadamoneytree Thu 08-Feb-18 22:11:17

TempusEejit has hit the nail on the head with what I'm worried about:
"AFAIK the divorce courts could order that they're jointly responsible for the debt but they can't order the loan provider to not hold the OP solely responsible i.e. they'd just come after her and it'd be her responsibility to chase up any missed payments from her ex".

It would seem it's not very clear- some think I'd be solely liable, others think he would be too, but even if that's the case the above would still apply. I can't find the original page I read but it was on stepchange, the debt helpline "Any debts or financial obligations that your partner has in their name will stay in their name only, and responsibility for their debts does not pass to you", this was stated even if both benefitted from debt- such as a holiday or home improvement.

DH is building up his credit rating and is doing well but any loans he'd be offered would have high interest, so as a couple the cheapest financial way to get the money is a low interest loan in my name.

To those suggesting a joint loan- because this loan is unsecured as we aren't homeowners, it seems we would need a personal loan which AFAIK can only be in one sole name (I asked Barclays directly, they said 1 name only).

Lalalalyra- we both have life insurance which would cover this. But it is a valid point to consider so thank you. You have reminded me we need to look at bills etc if I died as some are in my name.

Allthewaves- I hadn't considered putting both cars in my name as an asset. Can I ask how that works with insurance? Does it make it more expensive? Were there any ramifications of doing so?

We can afford the repayments for this loan together,so we would only be borrowing what we could afford to repay together...the problem is only if we split . We need the loan as we simply cannot get our hands on the amount we need quick enough any other way.

Peachsnowpop Thu 08-Feb-18 22:28:35

My worry would be if you took the loan out solely in your name, but he was legally liable for half of it, then separated but he then refused pay his share each month. By the time you had gone down the legal road to get him to pay his share there's a risk you could have already defaulted on the loan - if you were solely making the payments each month - and be blacklisted. I recently moved all our debt to joint names by refinancing, H doesn't know why I did that but went with it. I did it so I'm not left with the debt alone ... but also recognise i risk finding myself in the latter situation above.

Iwishihadamoneytree Thu 08-Feb-18 23:28:00

Peach- we are currently looking at a way to get the debt in joint names. You make a valid points about the situation you described. I'm thinking it would still be safer to have the debt in joint names as then any settlement would make us both liable rather than just me. I assume we would each take individual loans to pay off the joint loan, leaving us with individual sole name loans only severing the financial link (assuming DH credit rating would be better by then, it is improving).

I don't think I'd looked into joint loans enough after my bank said sole name only. I daftly assumed I'd just go with my bank but looking into alternatives way more now.

QuiteLikely5 I think my DH is offended unfortunately and I think if the shoe was on the other foot I would be too. I love him and trust him, I just want to protect myself should the miniscule chance this all goes wrong happens. I think he understands this. Took me ages to build up my excellent rating!!

DoublyTroubly Fri 09-Feb-18 03:52:22

Are you sure that you will be given the loan you need anyway? The bank has to look at affordability criteria and if you can’t afford to repay it by yourself then they really shouldn’t be lending it to you

G120810 Fri 09-Feb-18 20:18:01

Why are you talking about divorce I would be offended if I was ure partner you are a unit I would do it as it's for us both but in my name I certainly don't start thinking divorce and putting cars in u're name we both have our names on certain assets but if u need money take it if you think ure partner is divorcing u don't but we'll done for putting that in u're husband head cause he's not going to think all sorts I really don't know why divorce would be even thought about unless you have been reading other people story's you should be financially stable the both of you save each week both of u

AngelsSins Fri 09-Feb-18 20:44:47

OP, this situation happened to me. I took out a loan so the my DH could buy a car, amongst some other stuff we needed for the house. He swore if we split he would pay back half. Well, we did split and he refused to pay half because the car was no longer worth that much money hmm.

Maybe I could have tried to get some money back in the divorce, except I couldn't afford a solicitor (thanks to having all the debt and bills to cover) and his new girlfriend was one!

I ended up having to sign up to a debt management company and my credit was destroyed for about 10 years.

I would never put myself in that position again.

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