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Am I Liable for My Partners Court Enforced Debt?

Discussion in 'Debt and Bankruptcy Law Forum' started by neet, 30 June 2014.

  1. neet

    neet Member

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    My de facto partner was found liable by the Magistrates Court in WA to pay contractors when he never received the income..all a bit messy. However, the court debt is in his name. The magistrate said they can means test me as partner and I can be liable to pay. I have assets, home and cars under my name only. Can I be made to pay this debt if my partner can not? Please help I don't want to lose my hard earned property and be harassed by debt collectors when I have had nothing to do with this debt.
     
  2. Alan Bron

    Alan Bron Member

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    Hi: Unless you co-signed or guaranteed the loan agreement I do not believe you are liable for any of your partners debts. However if you jointly own assets I believe they can come after those if payment is not made.
     
    John R likes this.
  3. neet

    neet Member

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    Thanks I thought as much but I'm perplexed as to why the magisrate told the creditors that a. We are in de facto as we have lived 2 yrs together even though we have no joint financial interests b. That my income and assetts can be investigated and I be made by court to pay the debt c.it is clear the debt is not in my name at all and I never entered the agreement
    Why would the magistrate advise this to the creditors?
     
  4. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member

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    Hi Neet

    Alan is correct in telling you that if you have not co-signed or provided a personal guarantee over the loan then you are not liable for the debt.

    However, if your relationship status changes and you separate. Your de facto partner has property settlement entitlements to your combined financial interests, and this means that in any split the debts are paid first, and you split the balance.

    A creditor can have up to 12 years to enforce a judgement.

    If your relationship status changes during this time (that is, you separate), then the creditor starts looking at your combined marital (de facto) assets and income - knowing that your partner has gained property settlement entitlements under Family Law legislation.

    This is known as STD - "Sexually Transmitted Debt".

    "The general position in Australian family law proceedings is that in the absence of being able to prove "waste" or that the debt was not enforced or was unreasonably incurred, then debts which accrue during the relationship are shared. This is because marriage or a de facto relationship is viewed as an economic partnership.

    In certain circumstances, this can extend to becoming liable for your partner's debts even if they were incurred after separation. This is because debts usually "come off the top" of the pool of assets prior to deciding how the remaining assets should be allocated."


    If you stay together, the creditor has no right to collect the money from you.

    Please let me know if you need further clarification, kind regards, James.
     
    John R likes this.

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