How to deal with joint debt after a separation

Having a joint account with a partner can be helpful for paying shared bills and rent, and some people may find it makes managing money easier. But there are drawbacks to having a joint account, especially if you and your partner separate.

New research commissioned by Lowell has revealed some of the UK’s biggest issues with separating joint finances, and the difficulties and stress it can cause people.

That’s what our survey aimed to reveal, asking responders about the difficulties they faced when going through a financial separation.

Joint accounts can make financial separation difficult

Currently, half of all Brits in a relationship have a joint bank account. However, 47% of those people feel like they were not given the right guidance or advice on what would happen to their account if they were to separate. 

Our survey found that four in ten (39%) Brits found it difficult to separate their finances after splitting from their partner, and 58% believe that their previous experiences could put them off ever having a joint account again in future.

Financial separation can cause stress

With so many people having a difficult experience with joint finances, our new research also highlighted some of the most stressful events that have occurred for people who have financially separated from a partner.

According to the research, Brits found that the most stressful part of financial separation was agreeing what to do with the marital home and any outstanding mortgage (46%).  Another stressful element of financial separation was agreeing how to split savings, investments, and other funds (30%)

The impact joint accounts can have on your debt and credit score

You might not realise that having a joint account can have an impact on your individual finances. But if you take out credit under a joint account, both people on the account could be liable for any money owed. In fact, 45% of people we surveyed said that when they separated from a partner, paying off debts their partner had accrued was the most stressful part of the financial separation.

This can cause even more stress if your partner’s debts become unmanageable, or even worse, if they eventually become problem debt. That’s why recognising if a debt is yours is an important step in getting your finances sorted – read our guide on why you may be liable for a debt for more information.

Another potentially stressful element of financial separation is the impact it could have on your credit score. 31% of people we surveyed said that having their own credit score impacted by their partner's behaviour was one of the most difficult parts of a financial separation.

We’ve written before on how to speak to a loved one about debt, but it can be difficult to talk about financial problems with someone you care about. Even if you live with someone and share everything, finances and money issues are some of the most difficult things to talk about.

Helpful tips from Lowell

Separations are always difficult, and if you have combined finances then things can get even more tricky. Many people are not aware that when you break up, you are both equally liable for any joint debt – even if it was not you who spent the money.

To make sure things go as well as they can do during a separation, these are some steps you should consider taking:

  1. If you can, communicate clearly with your partner about what will happen with your finances. Talking things over and coming to a mutual agreement can benefit an already difficult situation, however, understandably, this is not always possible.
  2. Ensure that you tell your bank and creditors about your separation as soon as possible so that they can freeze the account and you can avoid creditors getting involved.
  3. If things are acrimonious, move your wage and regular incomes into a different account. This will help to keep things separate from your partner when you receive any future payments.
  4. Work out your new budget. Following a separation, your income and outgoings are going to substantially different to before. You should prepare yourself for this by working out a new budget, so you can understand your financial situation and what you are able to spend. Our budget calculator is a really easy tool for working this out.
  5. Know that you are not alone. As highlighted in the research, many Brits go through financial separations and although it is not easy, there are many people and organizations out there to help you - so don’t be afraid to reach out.

When you’re going through a tricky situation like a separation, dealing with finances might feel really difficult. That’s why at Lowell we’ll always take the time to understand your situation and try to find a way to work with you. If you’re separating from a partner and concerned about a debt that’s managed by Lowell, get in touch and let us know so we can see what we can do to help.


Published by Libby Davies on 26th July, 2021