The rules governing joint bank accounts may be more confusing than you originally thought.
Contrary to popular belief, a joint bank account does not necessarily mean the responsibility of the account is split equally. A partner within the bank account does not necessarily mean a partner for the debt or overdrafts incurred.
The debt created from joint bank accounts and who is held liable is becoming an increasingly problematic situation. What would you do if you found out your partner had taken the money from an overdraft and left you solely responsible for the entire debt?
The situation is becoming more common than you would imagine. Many divorces have recently noted husband or wives opening joint accounts, creating overdrafts and leaving the other account holder responsible.
The problem with many bank accounts is that many people in the UK do not completely understand how they actually work. Joint accounts are a bit of a misunderstood subject in UK law; both partners are “jointly and severally” liable for any debts. To put it simply this means if one partner runs up a large debt and isn’t able or willing to actually pay it off, the other partner is solely liable for it.
The rules around joint accounts are not always made clear to all parties when they sign up. Terms and conditions of joint accounts can run into over 40 pages of small, unclear text. A big problem with the current situation is that it is not necessary for both account holders to agree to larger proportions of debt, i.e. as a member of a joint account, the bank does not have to tell you if your partner has increased the overall debts associated to that account.
In a recent example Jo, a divorcee from London, found out that her then partner had created an overdraft and taken £2,700 just before the divorce. Despite informing her bank, there was little they could do, as he still refused to pay the money owed, and she wound up being responsible for her partners debt.
Joint accounts can be convenient but make sure the terms are explained in detail to you and never forget that all debts are jointly held but not necessarily paid back equally by both partners.