MARRIAGE has lots of benefits, not least financial. It might not sound very romantic, but there are huge advantages to tying the knot when it comes to money, provided you haven't maxed out your credit card on the big day itself.
Being married means sharing the cost of living. Household costs such as food, utilities, transport, holidays, birthday presents and insurance can be split, while savings will accrue much quicker than for singletons – although so can the debt.
Figu
res compiled and analysed from calls to our helpline for debt advice show that the average married couple owes £40,648 in unsecured debt – the highest of any marital status.
This also explains why, when marriages fail and a couple splits up, separated debtors are left with a pretty bleak balance sheet – owing on average £33,065 each.
As a result, bankruptcy is the likeliest outcome for one in five indebted individuals whose relationships break down, with 17 per cent sequestrated and 29 per cent entering into a protected trust deed – a less damaging course of action which sees a proportion of debt paid off and the remainder written off after three years.
This compares with just 9 per cent of married couples being made bankrupt and 22 per cent signing trust deeds. For single people the figures are 11 per cent sequestrated and 37 per cent entering a protected trust deed.
Separated people also have the lowest disposable cash of any group, with just £197 to spare after all outgoings compared to £420 for married people.
The reasons behind the debt problems of separated people are fairly obvious: finding yourself solely responsible for a mortgage, household bills and other expenses after perhaps years, or even decades of comfortable partnership can leave many people floundering – especially where one person had a higher income than the other.
Joint debt can also play a major part – when people split up they are both still liable for joint debt, such as mortgages, car loans, personal loans and hire purchase agreements. Should one party attempt to avoid paying, the remaining party is still responsible for paying the full amount.
One way of protecting yourself against financial woes in the event of a split is to be wary of accumulating unnecessary debt in the first place, particularly joint debt. Credit cards in particular are ones to watch out for as there is only one account holder, so even if you gave a second card to your spouse, and your partner ran up thousands of pounds on your account, you and not your free-spending ex-spouse are fully liable for repaying the debt. So it's definitely worth keeping an eye on those credit card statements.
Keeping a track on joint debt is essential too. Believe it or not, it is not uncommon for one spouse to enter into a joint debt agreement without the other's knowledge.
When it comes to home ownership, couples should also consult a solicitor to explore ways in which they can protect their investment in a property. Pre-nuptial agreements are not legally binding in the UK – although the Law Commission is reviewing this – but there are other methods that can be used.
It might not seem the greatest declaration of love but taking steps to ensure you are financially protected in the event of a split is only sensible and could prevent a long, acrimonious dispute that would just add to your stress.
• Ian Wright is managing director of debt solutions group www.newtomorrow.com
The full article contains 598 words and appears in The Scotsman newspaper.
