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article imageSurvey: Brits owe £55 bn in hidden debts

By Andrew John     Apr 24, 2010 in Lifestyle
A survey has revealed that people in the United Kingdom owe £55 billion in hidden debts, and almost a third hide the true extent of their debt from family members.
The poll was carried out by OnePoll for the UK’s Post Office. One disturbing feature of the situation is that a family home is put at risk by the activities of just one family member.
The BBC news website says: “One in six women (16%) and more than a quarter of men (28%) do not tell their partners how much they owe, the survey of 2,258 UK consumers suggests.”
It cites Nigel (who asked pollsters not to use his full name). He is 69, and lives near Bath. Nigel was unaware that his wife had taken out seven store and credit cards. But the money she owed rose to more than £50,000.
“She had a good credit score partly because she jointly owned the family home. They have now had to take out a mortgage on their house to clear the debt,” says the BBC story.
However, credit card companies do not escape some blame. Nigel is quoted as saying: “They were sending through pre-authorised cards to my wife. She had ticked a box stating that she was a homeowner but I was kept in the dark even though I jointly own the house with her.
“The credit card companies should inform co-owners if their partners are running up huge debts, which could affect the family home.
“The debt does of course need to be repaid. We have had to take out a mortgage on the house, which I can cover with my pension, but this was not how I hoped to be spending my retirement.”
Charging order
Under the rules, credit card companies do not need to inform joint owners about debts run up by just one of them.
“Although a co-owner of a property is not legally liable for their partner’s personal debts, a lender can demand the equity the debtor owns. If the case goes to court and a charging order is granted, the property may have to be sold,” says the BBC.
However, the British Bankers Association says that ticking a box marked “home owner” does not secure a loan, but is merely a part of the credit-scoring process.
Chris Tapp, from debt advice charity Credit Action, said Nigel’s position was unfair but not uncommon. However, he advised: “You can find out if you are linked to another person’s debt by running a credit check.
“Remortgaging your home may not be the best option if you are in debt. A good debt-management plan is an alternative. The most important thing is to speak to your lenders and seek independent advice from a debt advice charity.”
More about Debt, Hidden debt, Credit card, Greek banks, Mortgage
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