Debt consolidation loans 'cause problems for divorced couples'
Published On 31 March 2007
Couples who have jointly sought debt relief or used debt consolidation services and subsequently divorced or split up should inform relevant agencies as soon as possible, experts have advised.Chris Tapp, the associate director for the charity Credit Action, said that often debt consolidation loans were in the name of one half of the couple, and that this individual found themselves left with the whole debt when the relationship ended.
"Where you have couples borrowing and then there's a divorce, you can get very serious problems because there's such a drop in income," Mr Tapp explained.
"It's important that people make sure they're notifying both the creditors and the credit reference agencies, so it's going to appear on people's credit ratings as to why that's happened, so that can be taken into account."
Mr Tapp added that financial difficulties are often the reason relationships fail in the first place and that "it's a shame for money to break up the relationship, then kick you while you're down afterwards."
It is vitally important, Mr Tapp said, to make sure that credit reference agencies are aware of anything - such as a divorce - that potentially affect a person's financial situation as it could impact on their future ability to obtain debt relief or homeowner loans.
Over 150,000 divorces were granted in the UK in 2005.
