Could we have a joint Trust Deed?
If you and your partner have joint debts of at least £5,000 that you can't afford, you could both enter into a Trust Deed. A Trust Deed helps to make your debts more affordable and writes off any debt that's left on successful completion - normally after four years.
Although there's no such thing as a joint Trust Deed, your individual Trust Deeds will take your joint debts into account.
Joint debts on a Trust Deed
If you have joint debts with someone, both of you are jointly liable for the full amount. This is sometimes known as being 'severally' liable. It means that if one of you can't pay it, lenders can chase the other person on the credit agreement for the full amount.
In the event that you are both on a Trust Deed, however, the debt would be added to both of your Trust Deeds. You'd normally be expected to make payments towards this debt in proportion with how much each of you can afford.
Individual debts would only be included in each person's individual Trust Deed.
N.B. Credit cards with two people named on them are often mistaken as 'joint debts'. In fact, the person who owns the credit card is responsible for the full amount owing - even if the other person named on it spent all the money.
Applying for a Trust Deed
You can only apply for a Trust Deed through a licensed Insolvency Practitioner, who will talk to your lenders for you and explain why it is the right option.
At least half of your lenders must agree to a Trust Deed before it becomes 'protected' (meaning it is legally binding), and the lenders that do agree must own at least one third of your total debt.
A Trust Deed would impact your credit rating for up to six years. However, if you have joint debts and are struggling to repay them, it's likely that your credit rating is already damaged. As such, you shouldn't avoid seeking debt help and advice if you are worried about your credit score, especially if you have fallen behind with repayments.