Ask the expert: Husband's debt hangover

This week's expert is John Fairhurst

BBC News Online's Ask the Expert column gives readers a chance to have their financial questions answered.

This week, John Fairhurst, director of free debt advice service Payplan, answers a Your Money reader's query.

Louise (not her real name), who lives in France in a property bought for her by her estranged husband, has received a demand for money from a UK debt collector.

Louise has been told that she must pay her husband's £10,000 car debt but she can not track him down.

John Fairhurst writes:

The good news is that you should not be liable for your husband's debt, unless you signed the agreement or gave a personal guarantee.

Your main concern now should be how much your husband owes in total, and whether there are any other debts left unpaid.

It would be wise to contact your husband's car creditor and explain that you are now separated, and give them the last contact details you have from him.

DO YOU HAVE A QUESTION? Send your questions to our experts

Your husband's creditors should not be able to register a County Court Judgement (CCJ) at your address in France if he has never lived there.

But, the company can do this if your husband has resided at your address.

They could also sell the debt to a French collection agency, which may try and recover the funds through the French courts.

It would be advisable to research further as to the French debt recovery and court system, and have all the facts ready.

Paper trail

A creditor will normally register a CCJ at a debtor's last known address, so again try to give the creditor as much information as possible.

The key message is that you need to put every effort in to trying to locate your husband, and persuade him of the consequences for you and your children of his evading his creditors

If you receive maintenance from your husband, it may be possible to follow a paper trail to find out where the money comes from and make contact.

If your husband continues to evade his creditors, then they may consider making him bankrupt.

Bankruptcy can be undertaken in his absence and registered at his last known address.

If this happens, and the property in France was purchased in the last five years, then the official receiver will probably consider the property an asset of your husband.

In this case, you would need to prove to the official receiver that your husband was not insolvent at the time of purchase, and that the purchase did not cause him to become insolvent.

Otherwise the official receiver will have the right to pursue the debt. You may wish to apply for a property adjustment order through the courts as a defence.

Options

If you are threatened with bankruptcy, try to argue that you have a beneficial interest in the property because you maintain the upkeep and pay all the utilities.

If there is no mortgage on the property and the deeds are in your name, you could argue that you are also the beneficiary of any equity accrued on the property since purchase.

The UK has a reciprocal agreement with France for the seizure of assets, so if the worst did happen and your husband was made bankrupt, then you would have two options.

The first is to release the equity in your property in the form of a mortgage or by a third party buying out your husband's beneficial interest. The second option is to sell the property and give the money to the trustee administering the bankruptcy.

If you are unable to do either of these, then the trustee can force the sale of your property at auction to retrieve the debt.

The key message is that you need to put every effort in to trying to locate your husband, and persuade him of the consequences for you and your children of his evading his creditors.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.