Joint and Several Liability is when you take out and sign a joint credit agreement with another person. This means that both parties are liable for the repayments of the money borrowed.
This includes;
- Secured and Unsecured loans
- Mortgage
- Joint bank accounts
- Joint Tenancy
- Council Tax
If you have taken out a joint account with another person, this does not mean you are only responsible for half of the money owed. As far as a lender is concerned, both parties are equally liable for the full amount borrowed.
This can sometimes cause problems, especially in cases such as a split in a relationship. If one party decides not make any contributions to the repayments, the other party will be left with the debt. As far as the lender is concerned, the agreement is for either party to repay, if the agreement is not kept to, the lender can either choose to pursue one of the borrowers for the repayments or both.
The monies cannot be paid back twice but both parties can be pursued for the debt.
In other cases, if one party is made bankrupt, they will be released from the legal responsibility to repay the debt, leaving the other person fully liable to make the repayments.
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