Jayne Sinclair's husband Robert was keen to restructure the family's finances and suggested taking out a joint loan to pay off some debts and leave them with a little bit of extra cash.
But a week after the £30,000 loan hit their bank account, Jayne's husband left and she has not heard from him since. Unfortunately, neither has lender Northern Rock, which leaves her responsible for all the loan repayments.
Jayne, who lives in Northwich, Cheshire, was out of work and looking after the couple's child when Robert, who is believed to be in Europe, left in 2002. She says: 'Robert wanted to take out the loan to clear a couple of credit cards and pay off a car loan. There was a bit of money left over, of which I had £500 and he had the rest.
'The next thing I know, he disappeared and I haven't been able to track him down since. I'm now left with this loan and the bank are chasing me for it.'
Jayne, who works nights in the emergency call centre for a double glazing firm, said that her husband initially repaid a couple of loan instalments, but then payments dried up.
When a loan is taken out in joint names, each borrower is responsible for the whole debt if the other defaults on payments. That responsibility extends to bills such as utilities, council tax and telephone, even if the husband's name is on the bill.
Because 45-year-old Jayne is unable to pay, Northern Rock is attempting to secure the debt against her property through what is known as a 'Tomlin order', which charges interest at 8% a year.
Divorce lawyer Vanessa Lloyd-Platt of Lloyd Platt & Company warns couples that signing up for financial products in joint names is not always the most sensible option, particularly if one spouse isn't working or has no income to support themselves.
She says: 'There's often little point in signing up for products in joint names, but couples seem to do it because they think it's the right thing to do.
'But partners could be leaving themselves open to abuse if the relationship breaks down, such as one partner disappearing and the other being left with loans or mortgages. Also, if there's one half that takes out a credit and puts their spouse as a second cardholder and that second cardholder goes on a spending spree if the relationship breaks down, the main account-holder is likely to remain responsible.'
In Jayne's case it is not possible for the lender to pursue both names on the account, so it has targeted the remaining person. Unless she manages to track down her estranged husband, she will continue to be responsible for the loan.
In normal circumstances, where a couple has built up debts over the course of their marriage, both parties will be responsible for the debt if it has been taken out in both names, but it is open for negotiation as to who actually pays.
How the debt is attributed is similar to how assets are divided. The questions that affect this include: when were the debts taken out? What were they primarily used for? Did one partner bring the debt into the relationship and would both partners be able to afford repayments?
However, if one party is largely responsible for the debt, built up through a gambling addiction for example, this would be taken into account when making the divorce settlement.
But joint credit applications can still leave one partner burdened with the whole debt, even if the couple agree to split it or the higher earning spouse takes control over it. For example, if the partner who has taken responsibility for the loan declares himself bankrupt or cannot repay because of unemployment or sickness, the lender is entitled to come after the other name on the credit agreement for repayment.
If the debt has been taken out in just one name, ultimately it will be the responsibility of that person to pay it off, regardless of any agreement that the divorcing couple may have in place. Couples going through a separation process are advised to try to agree who will be responsible for debts, remembering that each could be responsible for debts the other will run up for the necessities of life during the separation period.
Both partners are responsible for any household bills that haven't been paid at the time of the separation. If you fear your partner will attempt to withdraw money from accounts or rack up debt maliciously once the relationship is over it is best to freeze accounts, such as joint accounts or credit cards.
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