Secured Loans

What are my Responsibilities Regarding Debt?

Debt is a major part of the economy and it is important for all people to understand their responsibilities and the expectations which are placed on them regarding debts. There are a few different types of debt, and many different ways in which debt responsibility can be defined, yet there are a few simple rules which a person should take on board so that they can understand what is expected of them. By understanding the law and knowing what they do and do not have to do, a customer can bring many benefits to their family.

Personal Responsibilities

Generally speaking, a customer has to pay back their debts, unless they are declared bankrupt. If a customer borrows money or other assets from an official lender, it is their personal responsibility to pay back the money which they owe to the company. This responsibility is to the extent that, if they are not paying back what they owe, the company can obtain court orders so that they will be able to force sale on certain properties to get the money which they require. It is however, up to the companies and banks which have lent money to the individual which will be involved in demanding that the debt is repaid, though they can get the legal authorities involved.

However, if the customer is declared bankrupt, their debt responsibilities will change. If a person can have them self declared insolvent, or if their creditors have them declared insolvent, they will not have the responsibility to pay back their debts in the same way as they did before. They will loose all their assets of value, which will be handed to their creditors, and after a certain period they will have their debts cancelled. This will also have long term effects, such as their having a bad credit rating which will make it much harder for them to get credit again. This is the nature the law in England and Wales, though the situation may vary in Northern Ireland and Scotland.

Family Issues

In the UK there are some complex issues which which surround the debts of family members, especially after they die, and the extent to which people have to pay the debts of their relatives. An important part of this issue is marriage, because if one of a married couple cannot pay their debts, the other will be responsible for the borrowing, though this does not apply if one of the couple defaulted before they got married.

People often assume that when a relative of theirs dies, any debt which they have will be the responsibility of other family members, this is rarely the case, however. The responsibility for paying the debts of the deceased person person lies with their 'estate', which is the name given to the legal entity which is charged with handling their affairs after they die. The estate will be responsible for selling any of the deceased person's assets to get capital to pay what is owed, anything which cannot be paid will usually remain unpaid.

It is clear that the question of debt and the responsibilities which are associated with is an important subject, and is one which will benefit people if they get the facts which apply to them. It is up to the customers and other people, therefore, to understand what rules will apply to them and the people around them, so that they will know how they should act if there are any issued with debt. In doing so they will know their rights if companies come to them demanding repayment.