Matrimonial Debt – My ex-partner has run up credit card debt. Do I have to pay?

There are two kinds of assets to consider in a marriage: matrimonial and non-matrimonial. Consideration is to be given generally for all assets in a marriage and for all liabilities.

The starting point when dividing finances is usually equality, which means 50:50. This means that assets and liabilities generally are all taken into account.

Just as assets are generally regarded as joint regardless of whose name they belong, debts are also to be considered this way unless the court is persuaded otherwise. The starting point is everything goes into the matrimonial pot and then that pot is shared equally.

If it can be shown a debt was accrued outside of the marriage, then this may be considered non matrimonial.

How a Matrimonial Debt was incurred

If you wish to be released from responsibility for a debt you will need to show what the debt relates to. If your spouse has run up credit cards on gambling which you knew nothing about then you may be able to argue that this is non matrimonial.

Likewise, if debts have been run up by your spouse on store cards buying items for themselves then you may be able to get the court to consider these as non-matrimonial. If, however the store card has been run up buying items you didn’t know about, but they have benefited the children such as clothing for the children or electrical goods for the kitchen these are likely to be considered matrimonial debt.

In fact, many debts may be considered for the benefit of the family even if you knew nothing about it.

As the starting point is equality, it is up to you to demonstrate that a debt is not a joint responsibility.

It could be that your spouse had a large debt or liability prior to your marriage. Again, the onus is on you to have this debt excluded. It should not be difficult to have this considered non matrimonial. However, in a very long marriage it could be more difficult to persuade the Court that this debt should not be considered matrimonial because it existed before the marriage or cohabitation began.

Joint Liability

If you and your spouse have joint debts, such as a mortgage, joint loans, joint overdrafts then you and your spouse are jointly and severally liable. Simply, if your ex is unable to pay then the lender will look to you to pay the debt.

Many people ask if they should stop paying a joint debt such as a mortgage, lawyers are not able to give you financial advice and here at Andrew Isaacs Law, we would always tell you the implications of a joint liability and how you could be pursued for such a debt. You should remember if you were to default on a mortgage or any other debt for that matter it will impact on your credit score and therefore your future borrowing ability.

Debts after Separation

If your spouse continues to incur debts after separation prior to you dividing your assets and recording that legally, then the rule of equality continues to apply. If it can be shown the debt is for the benefit of the family, then it is likely to be included in the matrimonial pot.

If your spouse runs up a debt and they are the only one to benefit, then it is likely you would be able to disregard this debt and your spouse will take full responsibility for it. For example, since you separated your spouse kept taking holidays by themselves and putting it all on a credit card.

The difficulty to consider is the costs of seeking the Court to consider this debt and order that it is non matrimonial could outweigh the debt itself.

How will the Debts be split?

A Solicitor can only give you a guide as to what a Judge will decide should your matter proceed by way of Court. It is important to remember that each person’s financial situation is different, and the needs of the family members are different too.

It is unlikely that individual debts will actually split where you both pay towards them. The Court does not have the power to transfer debts either. The way they would be factored into a financial settlement would be part of the decision of how the matrimonial pot is distributed.

If one spouse has a debt in their sole name that is considered matrimonial in nature and the matrimonial pot is to be split equally, then the spouse whose name the debt is in will receive a greater share of equity to equate for the debt that they have to continue to pay.

An example would be if you have £40,000 of equity in the family home and no other assets except your spouse has a £10,000 loan which has been for the benefit of the family in their sole name. The matrimonial pot is to be divided equally, then your spouse would possibly receive £25,000 and you would potentially retain £15,000 of the equity.

The above is only an example and should not be used as a calculation for your own circumstances.

How to move away from Equality

If you read other articles available on our website, you will understand further how finances may be divided. Equality is of course the starting point, but this is not always how assets are divided. Several factors are considered such as needs, contributions, conduct and compensation. Therefore, dependant on the circumstances of your marriage and finances, a debt may not be split equally if there are other reasons for a different division. It may be that one party keeps all the debt even when it is matrimonial debt, and the other spouse still gets to keep all the equity in the home or other assets.

A Court does not have to make the decision on who is to be responsible for debts. If you and your spouse can agree and one of you accepts responsibility for a joint debt, this can be dealt with in a Consent Order.

Should you wish to take independent legal advice then please do not hesitate to contact our offices to book a fixed fee consultation, with no obligation to instruct.

Roxanne Woolliams – Family Solicitor 27.10.22