This is the crucial first question to ask if you have a problem debt. Often the answer is simple – “Yes it’s my debt, no ifs or buts” but there are a lot of “odd” situations where you may wonder whether you are liable for the debt or what to do if it isn’t really yours.
No – I’m here to help someone else
That’s kind of you! I hope you find Debt Camel useful.
- If it’s your partner, then there are some ideas here about how to manage debt in a relationship. Even if you are married, you don’t legally have to pay your husband or wife’s debts, but it’s good to be able to find a way forward with their problem.
- If someone has asked you for help, it may be best if you suggest they come on here themself if they have internet access, because you may not know enough about their full situation. If they are feeling overwhelmed, the best thing you could do is sit down with them, help them sort through the piles of letters they may have … there is some more practical advice about this situation here.
- If they haven’t asked for help but you are just worried about them, I hope you can get some feel for what their options might be. But if they haven’t “had their lightbulb moment” then it can feel a bit like watching a slow-motion car crash.
No – but the letters are coming to my house
If you are getting letters from debt collectors addressed to a previous occupant, you may be worried about bailiffs. This is a nuisance and it can go on for a long while – even when you have persuaded one creditor that you don’t owe the money, the debt can be sold on and the letters start again. But it won’t be more than a nuisance. Debt Camel suggests the following approach:
- if the letters are from creditors or debt collectors, if you have a forwarding address tell then once, otherwise return the envelopes ‘not known at this address’. Put them in the bin when you get tired of this.
- if the letter looks like court papers or from a bailiff, call them and say the previous occupant is long gone. Offer to supply a copy of your council tax bill to prove that you are now the occupier. (Of course legally you don’t have to do this – but this is practical advice to stop the problem!)
- in the highly unlikely event that a bailiff does turn up, tell them the debtor doesn’t live there, show your council tax bill and they will go away. In other situations bailiffs can be difficult, but this is simple.
If the person that owes the money is part of your family, it can be harder to convince the creditors that they no longer live there or you don’t know where they now live. Perhaps they do still live with you… Obviously telling the person that owes the money they have to sort the situation out should be your first step. You normally don’t have to let bailiffs in and you should make sure everyone in the house knows not to open the door to them. But your daughter hiding in her bedroom needs to understand that although you may be able to keep the bailiffs out, her debt is rising every time they call and she needs to stop being an ostrich about it.
You don’t need to worry that your own credit rating will be affected by someone else’s debts. It won’t, unless you have a joint account with them.
It’s a joint debt, I shouldn’t have to pay it all
If it is a loan in joint names, then the creditor is allowed to just chase you. This usually applies to council tax as well – if you have been sharing a flat, then all the non-student occupants are probably ‘jointly and severally’ liable for the council tax.
This may seem very unfair, but in practice you have to treat this debt as one that you have to deal with. You may be able to get some of the money back from the other people either through your divorce settlement (tell your lawyer about it) or through going to court with a small claim if you can’t get the others to pay their share.
Problem parking tickets
The Notice to Owner will have been sent to whoever the DVLA thinks owns the car:
- if you have sold it and the offence was committed by the new owner, or you have bought it and the offence happened before you bought it, you should inform the DVLA and appeal the tickets, giving details of who you sold the car to;
- if the car was stolen when the offence happened, appeal the ticket and provide the crime reference number as evidence.
Contact National Debtline who can advise on how to tackle all these sorts of problems. This also applies to other fixed penalty fines such as not paying the congestion charge or driving in a bus lane.
Otherwise, if it’s your car but your partner or child was driving, then you are liable for the tickets and you need to get the money back from them – good luck with that …
It’s in my name but I don’t owe the money
This may be because you think you have repaid the debt years ago or because you can’t remember ever borrowing the money. In this case you need to ask the creditor to prove you owe the money – see this sample “Prove it!” letter.
If you know you never borrowed this money but the debt collector insists the debt is yours, then it could be identity theft. Report it to Action Fraud – this will give you a crime reference number. Then tell the lender that you have been the victim of fraud and give them the reference number.
You should also think about applying for Cifas protective registration, which will make it much harder for anyone to take out credit in your name – find out more about identity theft here.
If a partner or relative forged your signature, it can be very hard to report them to the police. But if you don’t do this, the creditor is not going to listen to your claim that it’s not your debt. If you have been paying the debt for some time, the creditor is unlikely to accept that this is not yours.
My name isn’t quite right
Don’t ignore letters – or even worse court forms – if you know what the debt is but there is a small typo. This sort of thing is very unlikely to be a good legal reason why you don’t have to pay the debt.
If you have changed your name, you are still legally liable for debts taken out in your previous name.
If you aren’t sure, call National Debtline on 0808 808 4000 where you can explain your situation in confidence.
My dad died leaving more debts than assets
Paying his funeral costs is your top priority, no matter how many other debts he had – there is an article here about paying for funerals.
After that, you need to divide up any remaining assets between his creditors. If there is still money owing after that, then the debts effectively have died with him – you can’t inherit debts and you don’t need to pay them yourself. Send the creditors copies of his death certificate with a letter saying that there is no more money to pay them.
It is my debt but it’s really old
If you have not had any contact with the creditor for more than 6 years for an unsecured debt, or 12 years for a debt that was once secured (for example a house was sold and the mortgage was not fully repaid) then it may be that the debt is “statute barred”, in which case you do still owe the money but the creditor may not be able to legally enforce the claim.
This is a complicated area – read Statute Barred – Common Questions for what to do.
I agreed to be a guarantor for this debt
In that case, the creditor probably does have the legal right to chase you for the debt. I say “probably” because there may be a grey area if you weren’t properly informed about what you were signing and its implications or you feel that you should never have been allowed to act as a guarantor because you can’t afford the repayments.
If you want to complain about Amigo or another lender, read How to complain if you are the guarantor for a loan. Your local Citizens Advice can help you with this.
Creditors in this situation are often very quick to take you to court for a CCJ. This ultimately could lead to a charging order on your house or even (very rarely) bankruptcy. I’m not trying to scare you here, but it’s important that you take repaying a loan you have guaranteed just as seriously as you would a loan that you took out yourself.
If you are currently thinking about agreeing to be a guarantor, ask yourself how difficult you would find it to repay the debt. Also ask what the interest rate will be on this guarantor loan – you may assume your son could repay it, but often the interest rates are incredibly high – 50% is quite common. This means that your son is more likely to get into trouble and will also make the loan very expensive for you if this happens. It could be much better for you to loan your son the money yourself!
I didn’t understand what I was signing
If you (or the person you are trying to help) were under 18 or lacked the capacity to make a valid contract, because of learning disabilities, mental health problems such as dementia or because you were under the influence of drugs or alcohol, you may be able to cancel a contract. Go to your local Citizens Advice and ask for help with this.