Joni’s Story Joni was separated from her husband, Jim. Before the separation Jim’s business had been going badly and he had started gambling on poker machines. Joni and her two children still lived in the family home and she had not had any contact from Jim for many years apart from the odd birthday card for the children. For the first few years after the separation Joni had struggled to keep up the loan repayments for the house, but now things were a bit easier. Joni had never worried about getting a property settlement to finalise things between them. Now Joni has received a letter saying that Jim is bankrupt and that his share of the house will have to be used to pay all of his debts. |
The end of a relationship often leads to financial hardship, especially if you are supporting children with little or no help from your ex-partner or you have joint debts which your partner is unwilling or unable to help you pay.
You are not responsible for your partner’s debts just because of your relationship, whether you are married or not. However, you may have become liable for his or her debts because you signed a loan contract as a joint borrower or guarantor, or because you were a director of a family company or a partner in a business. In most cases you will not be able to get out of loan contracts you have made in the past,
but you should get legal advice about this. There are a number of services which may be able to assist you. The box below contains a checklist of steps you may want to take to stop your financial situation from getting any worse. TO PROTECT YOUR FINANCIAL POSITION WHEN YOU SEPARATE THINK
ABOUT: - Bank Accounts
Close any joint accounts. You may want to give some of the money from the closed joint
accounts to your ex partner, or use the money to pay joint debts. - Home and other joint loans
Notify the lender of the separation and of the arrangements for paying the loan. Arrange
for statements to be sent to you at your new address. If your home loan has a redraw
facility or linked credit card account, write and ask the bank to stop these facilities. Keep
a copy of your letter to the bank. - Credit Cards
If you have a joint credit card account, or your ex partner has a second card on your
credit card account, close the account if you are able to pay what is owed. If you cannot pay the account in full, write to the lender informing them of the separation and ask that no further credit be given on the account. - Utility bills
Transfer or disconnect telephone, electricity, gas and water if the accounts are in your
name and you are moving out. - Rent and Bond
If you are moving out of rented premises you will need to negotiate with the landlord to
be released from the rental agreement. Otherwise you could still be liable for rent after
you leave. You may also have to apply to get your bond returned, or transferred. - Keep copies of letters and documents and get advice
Get legal advice about your children, any family business and property settlements. If
you are having problems with debts or dealing with banks, see a financial counsellor.
Property Settlements A property settlement is an agreement registered in a court between a couple who have
separated or divorced about how their property should be divided between them. If a
couple cannot come to an agreement, a court has the power to make orders about how
property should be divided. Property settlements or court orders can be made between couples who were married or
couples who were in a de facto or same sex relationship. Although a court does have power to divide property, it does not have the power to divide debts or change your contract with a lender (whether you are the borrower, or guarantor of a loan). If there are outstanding joint loans at the time of a property settlement, consider the
following options: - Ask your ex-partner to get another loan in his or her own name and pay out the
existing joint loan. - Sell any available property to pay out all joint loans.
Ideally, a property settlement will end all financial ties between you and your ex partner
and all outstanding joint debts will be repaid, or refinanced in the name of one partner
only. Important - if you are the director of a company or you have signed a contract of
guarantee, get legal advice. If you are getting legal advice about a property settlement,
tell your legal advisor about all loans, contracts of guarantee and family business
arrangements. Getting help LEGAL ADVICE
Consumer Credit Legal Centre: 1800 808 488
Legal Aid Helpline: 1800 806 913
Womens Legal Resources Centre:: 02 9749 5533 or 1800 801 501 FINANCIAL COUNSELLORS
Credit Helpline:information and referral to a financial counsellor who can assist you to
negotiate with creditors and deal with financial institutions 1800 808 488 TENANCY ADVICE
Tenant’s Hotline: (02) 9251 6590 OTHER
Mortgage assistance:
Available in some circumstances to people temporarily unable to pay their loan.
1800 806 653 or (02) 9821 6502
Fair Trading Centres: 13 32 20 www.fairtrading.nsw.gov.au
Australian Banking Industry Ombudsman 1800 337 444
Interpreters: 13 14 5
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Fact Sheets 
