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A broken relationship doesn’t need to mean broken finances...

At the outset of any relationship two people are hopelessly in love. They would do anything for each other and quite often the depth of that love can blindside a person. A person may choose for example to gift an asset to the other partner for nothing in return or may decide to place a partner on the title deeds of a property they once solely owned for ‘love, favour and affection’ or ‘certain good and onerous causes’. A partner who does not own a property may be invited to move in with the partner who does own property and then proceeds to live there at no cost. A couple in the early stages of a relationship may decide to go on a credit card spending spree, buying new household items with which to feather their new nest or book a series of luxury holidays during which they cement their relationship, that credit card will rarely be in joint names, so who picks up the inevitable bill?

What happens if the rosy hue of love fades and the cracks in the cement appear? No one ever likes to think of this inconceivable possibility at the outset of a relationship, however, according to a news article in The Independent on 16 February 2016 42% of marriages end in divorce and that does not take into consideration co-habiting and civil partnership relationships which may break down too.

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Upon irretrievable breakdown of a relationship whether that be of a long term co-habitation, civil partnership or a marriage, one partner may be financially disadvantaged, whilst the other person is seemingly unjustly enriched. This blog seeks to highlight some matters to consider when entering a new relationship which may help maintain your own solvency should your relationship ultimately break down:

• Go into any financial commitment with a partner on an equal financial footing. If you are going to buy a house, make sure you both put down the same amount of deposit and/or invest the same amount of equity and make sure your solicitor reflects this in binding legal documentation. It will mean if your relationship does break down, then after costs, you both will receive an equal share of the final net proceeds so you can both move on with your lives independently.

• If you already own your own home and meet someone new who does not own their own home, don’t be persuaded by them to add their name to your title deeds for no consideration. This will mean only you lose out if the relationship subsequently breaks down. By agreeing to this course of action you are effectively giving away your assets and this is a bitter pill to swallow particularly if it was the other partner who decides to leave you.

• If you own your home and your partner doesn’t and you decide to move in together set a fair amount to be paid to help with household bills and the mortgage. The last thing you want on the breakdown of a relationship is a non- contributing partner then claiming ‘squatter’s rights’. Again it will only be you that loses out.

• By all means have a joint bank account for any household bills, joint expenditure (such as holidays and nights out) and mortgage payments if you are living together and make sure all bills are in joint names and are paid monthly by direct debit where possible. The last thing you want to do is ‘trust’ a partner to be paying the essential bills only to find out following a relationship breakdown that instead those funds have been supporting a rather excessive gambling habit and you are now facing bankruptcy proceedings for non-payment of your council tax.

• For personal spending it is always recommended to maintain your own personal bank account. You can then keep a track of what you are spending once your joint liabilities of living together have been met.
• Make sure you both keep track of your own spending on credit cards and store cards. Don’t be swept along on a spending spree which benefits a partner but lands up with credit being in your sole name. If the relationship breaks down you will still be liable to pay these bills.

• Never be persuaded to enter into any personal loans, hire purchase or lease contracts on behalf of a partner. You will only ever be the person responsible to repay the sums due and these can be particularly onerous if your partner has left you following your relationship breaking down.

• If you are a sole trader make sure you keep your business bank accounts and business assets separate to your personal bank account and personal assets and don’t be tempted to gift or loan anything from your business to your partner. You will not be able to recover it easily following a breakdown of the relationship.

• You may have drafted a will at the height of happiness in your relationship which is in favour of your partner. Please make sure on relationship breakdown that you change this to reflect your current wishes, otherwise your ex-partner could again be unjustly enriched in the event of your death.

If some or all of these scenarios have happened to you and your relationship has broken down and you are now struggling with any of these issues you need to get support and advice as soon as possible to avoid reaching a position whereby these become unmanageable. This is where FD Debt Solutions in Scotland can help.

We understand that sometimes when a person is going through a significant life event such as the breakdown of a serious relationship that they struggle for some time to come to terms with being on their own again, depression may even strike.  This may lead to that person burying their head in the sand to avoid facing the day to day routine of life, including dealing with their financial affairs and eventually the only option for them is formal insolvency. We also understand from past experiences that the earlier you can come and talk to us, the sooner we can help alleviate the almost certain stress that any type of financial pressure creates. If you would like to make a confidential appointment, we are here to listen and help, call us now on 0800 652 0002.