Every Tuesday, we get an expert to answer your financial problems or consumer disputes – you can WhatsApp us here or email moneyblog@sky.uk. Today’s problem is…
My mother has been separated from her partner since 2006. I know initially divorce wasn’t possible but in their separation agreements they split their debts and defined who pays what.
Since then, my biological father has been out of the country, spanning from Germany to Saudi Arabia, and he has neglected paying his debts which my mum has been receiving correspondence for at our home address. She recently opened a letter about a £700 debt from 2003 still to be paid, due from my dad’s side of the agreement. My mother under duress explained the situation and ended up just agreeing to set up a payment plan for this to stop further letters coming through the door.
I am wondering if there is any need for her to do so. I advised her to speak to a lawyer about this but she is reluctant due to high fees. Ultimately I don’t believe this is right. On top of this there is a fear that our house, if sold, would be 50% my father’s under marital property. She has paid the majority of the mortgage since their split and recently cleared it.
Ross Coyne
Hey Ross, thanks for getting in touch with this problem and sorry to hear about the situation your mum is in.
There are several elements to consider but the main ones will be around the legality of your mum’s separation agreement and the debt repayment.
I spoke to Shivi Rajput, partner at Stowe Family Law, about this, and she explained that separation agreements are not legally binding like a court order.
They are private contracts between two separating partners that can set out arrangements around assets, debts and maintenance.
This means it cannot bind creditors, and it does not prevent either person from later applying for financial remedies.
What does this mean for the £700 debt?
On the £700 debt, a creditor can only pursue people who are contractually liable.
So, if the debt was only in your father’s name, he alone must pay it, but if it was in both their names, the creditor can legally pursue both of them for payment.
Rajput says the first thing to establish is whose name the debt is in, which your mum can do by asking for the original credit agreement and evidence that she is a party to it.
“If the debt is not hers, she is not liable to pay and she should send written notice to the collector disputing liability,” she says.
It’s important to remember that debt belongs to a person and not an address, so if the letter has been sent to her home simply because it is the address that your father registered the debt with, there are steps she can take.
Debt charity Step Change says you can send a copy of your council tax bill to the creditors that are trying to make you pay to show who is living at the address – which would prove your dad does not live there.
You could also write “not at this address” on the envelope of the letter and send it back to the sender.
Letters from courts, bailiffs or about County Court judgments shouldn’t be ignored, even if they have been sent to you incorrectly. You should tell them that they have the wrong address and ask them to update their records.
If your mum is liable for the debt but the separation agreement confirmed your father would pay this, then Rajit says she should maintain the payments to protect her credit rating and then get your father to reimburse her.
The other thing to consider here is when the debt was incurred.
Since it was acquired 23 years ago, Rajput says it is likely statute-barred under the Limitation Act 1980.
This applies to debts that are more than six years old and means that creditors cannot take legal action to recover them if no payment or written acknowledgement of them has been given.
This six-year clock restarts once a payment has been made or there has been a written acknowledgement of the debt.
“As your mum has now agreed to set up a payment plan, this has likely restarted the clock, depending on what exactly was agreed and whether she was legally liable in the first place,” Rajput says.
“Clarity on the debt is crucial before any further payments are made.”
What about the family home?
You also asked whether there is a risk your father could claim 50% of the family home.
Rajput says the court would consider various factors when assessing what a fair split of equity would be.
A main consideration would be the needs of your mum and dad, but others would include:
- The length of your mum and dad’s marriage;
- The length of time that has passed since their separation;
- Contributions made;
- Any agreement entered into between them at the time of separation.
The starting point is that the family home is usually shared equally, but this is only a starting point.
“Your parents have been separated for 20 years now, during which time your father has not contributed to the mortgage and has been financially absent,” Rajput says.
“Post-separation accrual and your mother’s greater financial contributions are relevant factors. If your father’s housing needs are already adequately met, this would also be relevant.”
Since your parents are separated, they are likely to still be legally married, and if that is the case, Rajput says your mum should seriously think about starting divorce proceedings.
If not, she could obtain a financial consent order, which could detail what would happen to the family home.
She could also get a clean break order – a legal binding financial order that severs all financial ties between ex-partners – that would make it clear that your dad is responsible for his own debts.
“Until this happens, their respective financial claims remain open,” Rajput says.
