Is my partner’s income affected if I go bankrupt
- 29 Jun 2022
Neither your partner, spouse or any other family member is required to use their income to pay your debt if you go bankrupt. However, they will be expected to contribute towards their fair share of the household living expenses.
Included in this article:
- Can your partner keep all their income if you go bankrupt?
- Do you have to provide details their finances?
- What if their income goes up while you are bankrupt?
Rather speak to a person? Call 0800 044 3194 or click here to complete the form below and we’ll call you
Can your partner keep all their income if you go bankrupt?
Your partner does not have to pay your debt if you go bankrupt. Their income can continue to be paid into their bank account. They remain in full control of their money.
However, they are expected to contribute towards their fair share of the household bills. You can’t argue that you pay everything and they pay nothing. This would artificially reduce your ability to make ongoing payments towards your debts.
For this reason, you will be asked to declare both your incomes and your full household expenses budget on your application form.
The Official Receiver (OR) uses the total household income and expenses figures to calculate the household surplus income. This surplus is divided based on the same percentage of the income you both contribute. Your partner keeps their share. You have to pay your share towards your debts.
Your partner’s bank account will remain unaffected if you go bankrupt. However, it you have a joint account you will normally need to take your name off it.
Do you have to provide details of your partner’s finances?
The bankruptcy application form asks you to provide details of your household income. This means your partner’s income from wages, benefits or any other source. However, it is only required if both your incomes are intertwined.
A good example of intertwined incomes is where you each pay some of the household bills. This would often be the case if you have children. Alternatively if you have been living together for a long time.
Giving your partner’s income is not necessary if your finances are totally separate. In other words, financially, they are not part of your household. A good example of this is if it can be argued that you live with them as their lodger (or the other way round). This would be the case if you pay them a monthly rent and do not contribute to household expenses in any other way.
If you are lodging in a property, it stands to reason that you would not provide details of your landlord’s income if you go bankrupt. They are not part of your household and it is nothing to do with them. It is no different if your landlord happens to be your partner.
What if your partner’s income goes up while you are bankrupt?
Your partner or spouse’s income might increase during your bankruptcy. If this happens, the official receiver would like you to tell them.
If their income goes up, the amount they can contribute towards the household expenses will also increase. As a result, more of your income may be freed up and you will be able to increase the amount you pay towards your debts.
That said, they are not the bankrupt person. As such, they are not legally obliged to tell the OR when their circumstances change. Only you are under an obligation to do this.
This stands to reason as it is possible that your partner may not tell you if their income goes up. You can’t be penalised for not telling the OR something you know nothing about.
Want more advice your partner’s income if you go bankrupt? Call us (0800 044 3194) or complete the form below for free, confidential and no obligation advice.