How to Avoid Paying Your Ex’s Debts; Even After You Have Divorced!

You might think it goes without saying that, once you separate from your wife or husband, their debts go the same way, and you’re no longer answerable to the collectors attached to them… but you would be wrong.

In our long career in the legal profession, we have come across far too many individuals who didn’t protect themselves financially when they decided to separate from their partner. This is demonstrated most recently with Trinny Woodall (of the famous Trinny and Suzanna fashion duo), who found herself centre-stage of a tough legal battle.

According to reports, Ms Woodall is being pursued through the courts for debts of almost £300,000 left behind by her deceased ex-husband. Back in 2009, the pair agreed on a settlement stating that Johnny Elichaoff should pay Ms Woodall £24,000 a year in maintenance, whilst repaying the £1.4million she lent to him over their ten-year marriage.

However, just before the divorce could be finalised, Mr Elichaoff declared bankruptcy, prompting a judge to invalidate the original settlement earlier this year. The new legal battle facing Ms Woodall comes off the back of the trustee to her husband’s bankruptcy claiming that she should have been paying her husband maintenance after their marriage ended.

When Mr Elichaoff died, he left debts of up to £285,000, which creditors are claiming Ms Woodall should pay, plus legal fees, as the wealthier party. The trustee, Ian Robert, now wants to “step into his shoes” to pursue Ms Woodall through the courts to try and force her to pay his debts.

A spokesman for Ms Woodall, said: “This is a nightmare for an innocent spouse who received nothing on divorce, yet years later is sued by a trustee in bankruptcy, asserting an unheard-of claim to spousal rights of her deceased ex-husband.”

Her barrister, Caroline Hely Hutchinson, said that the trustee’s claim was “factually outrageous” and targeted “a single mother who received no property from her husband either during the marriage or afterwards, and who has alone provided for their child.”

Case Studies

It’s easy to dismiss these cases as being high-profile, celebrity situations, and not applicable to most marriages, but this is far from true. At Hylton-Potts, we’ve seen all manner of cases and circumstances come before us, and we feel it’s our duty to help you protect yourself when you’re going through a divorce.

You’ll already be experiencing emotional stress and upset, so you need to try and safeguard yourself against potential problems being dragged up again in future. This certainly was the case for one lady who wrote in to the Guardian for help. She received a bill from her mortgage lender for £9,000, because her ex-husband’s home was worth less than the mortgage.

She claims that while she jointly owned the property until their we divorce, the settlement awarded it to her ex-husband, stipulating that he should seek to release her from the mortgage obligations, and indemnify her against any future liabilities. However, he refused, and after declaring himself bankrupt three years later, she found herself having to take on the mortgage payments of £329.51 a month.

After trying to sell it to pay the loan, the only offer she received was £9,000 below value, which the lender is pursuing her for. Although it may seem unfair, the terms of a divorce do not affect the terms of a mortgage, and if you are named as “jointly and severally liable” for the debt, the lender has every right to pursue you for any shortfall or payments.

In a similar case, Vivienne Avis, was faced with selling her £150,000 semi-detached property after her husband’s unpaid debt of £3,000 to the Inland Revenue from the 1980s ballooned to £73,000. She may not have lived with her bankrupt ex-husband since that time, but the courts ruled that, regardless of divorce terms, his creditors could demand the sale of the home to recoup what they were owed.

Even ex-husband Raymond Avis, was shocked that she could lose her home because of him. He claimed he was “stunned” to find himself being pursued for £73,000 after the original debt to the Inland Revenue spiralled, due to interest, administration and court costs.

He added: “This bankruptcy dates back to the time after my divorce, when I had problems organising my life, and the Inland Revenue decided to make me bankrupt for less than £3,000. The sum that is being sought by the trustee has escalated to more than £73,000. It is quite incredible.

“It is going to send shockwaves through people like us who believe they have legally-binding divorce settlements, only to find it is not worth the paper it is written on.”

What can I do?

By this point, you’re probably asking yourself what you can do to save yourself the unnecessary and painful proceedings described above. As with most things, it all begins with educating yourself on where you stand when it comes to things like credit agreements, mortgages and tenancies.

A joint credit agreement with your partner could be a loan, credit card or overdraft, but if it’s a credit facility held in both your names, you will be jointly liable. If the agreement is against an account, it’s important to get these frozen as soon as possible before sitting down with your partner to try and reach an equal and amicable agreement.

In such circumstances, you may feel concerned that your partner will want to make things more difficult for you, so if the divorce is a particularly volatile one by this point, you may need a legal advisor to put across your wishes calmly. If you hold a joint agreement, and your partner defaults on payments, you will be chased for the money.

Plus, any joint credit agreement will affect your credit rating, regardless of whether you were responsible for a bad one being created. Only after the money is paid back will you be able to close the joint accounts.

If you have a mortgage with your partner, both of you have equal rights to the marital home and the property will be awarded to either party through the courts. As we discovered in the case from the Guardian above, no matter what the divorce settlement states, having yourself removed from the mortgage if you are not awarded the house is a separate process. This is one of the reasons it is so important to try to stay civil during the divorce, so that everyone can part ways feeling satisfied with the outcome.

However, it’s worth noting that if you’re in the situation where your partner has the mortgage and payments in their name, but you pay for bills, you can apply to the courts for recognition of your contribution, known as ‘beneficial interest’. If granted, you may then be able to stay in the property or receive a pay-out if the house is sold.

If you’re in the process of getting divorced and you’d like to know more about safeguarding your assets, the best thing to do is to seek advice from our legal experts as soon as possible. You can call us on 020 7381 8111, or email us at [email protected].

We would be interested in your comments, please leave them in the section below.