Living with others can be financially beneficial because it enables many people to reside in housing they could not afford on their own. A flatmate shares rent, utility, and other bills, making living independent from the family more affordable.
In some cases, utility and service accounts are established in the names of both people. Flatmates establish different systems for repaying these bills and one arrangement involves one person submitting payment for his or her portion of a bill to the other person, who then pays the bill in full.
If your former flatmate has signed a contract or tenancy agreement or has a utility bill in their name, then they will be also be liable for any outstanding liabilities or debts.
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This situation works out well as long as both parties can afford the expense. If the living situation changes but one flatmate continues the service but does not change the account into his or her name only, problems can arise. If the individual who continued the service experiences financial difficulties and is unable to pay the bill in full, the former flatmate could be responsible for the expense.
Each person listed on a joint account can be held liable for the full expense if the other person does not pay it. Even if one party files for bankruptcy and is no longer required to pay the bill, the creditor may pursue the other party for full payment, regardless of whether the two people are still living together or the second party is not using the service. This is a very unfortunate situation that illustrates the importance of being aware of all accounts in your name.
Think carefully before taking a joint account with a flatmate.
Request a current credit report from the individual to determine whether he or she is financially responsible. Inquire about employment status to verify that the job is stable and provides sufficient income. If you have any doubts about whether the person will be able to pay his or her share of the bill, have that individual take the account individually and provide your share of the payment as required.
If you have a joint account with a flatmate, remove your name from the account when you move out of the flat. A creditor will not accept the excuse that you forgot to change the account from joint status. Make the change as soon as possible so your credit will not be affected by something your former flatmate does.
Always obtain written confirmation that the requested change to the account has been made
Verify that the account did not have a balance at the last point your name was on it. If it did, repay this immediately and recoup the money from the former flatmate as soon as possible. Paying the bill in full prevents late fees and interest charges from accruing.
Review your credit report on a regular basis to make sure that all included accounts are yours and there are no past-due balances. If you find a joint account with a former flatmate, deal with the issue immediately. This may require opening a new account with the same provider but this extra effort is worth it based on the problems that could otherwise result.