Joint Default Credit File: When One Account Affects Two People

Getting rejected for finance because of a default is frustrating. Getting rejected because of someone else’s default on a joint account you barely remember signing up for is even worse.

A joint default credit file listing affects both account holders, even when only one person caused the missed payments, moved house without updating the address, or continued using the account. Both credit files can be damaged by the same debt, creating problems for both people’s future finance applications.

Got a default on your credit file? Lodge it with Default Gone right here, or call us on (02) 5502 7025. $399 flat per consumer per default. We do not guarantee removal — outcomes depend on the facts of each case — but we will prepare and lodge the dispute properly.

Some joint defaults are correctly listed. Others are worth challenging because the account was not properly set up as joint, the liability was not clearly explained, or the required processes were not followed before listing.

How joint accounts become joint defaults

When two people open a joint account — whether it’s a credit card, personal loan, store card, or utility account — both are usually jointly liable for the entire debt. This means the credit provider can pursue either person for the full amount, regardless of who spent the money or used the service.

If the account goes into default, the listing can appear on both credit files with the same date, amount and status. Even if one person had no idea the account was in arrears or that a default was about to be listed.

Common joint account scenarios

Joint defaults often arise from:

• Joint credit cards where one person continued using the card after separation
• Shared personal loans taken out by couples, business partners or family members
• Utility accounts in both names at a rental property or shared house
• Store finance where both people signed the application but only one person dealt with the account
• Business accounts where personal guarantees created joint liability
• Phone or internet plans in both names but managed by one person

The key issue is that joint liability continues even when the relationship ends, one person moves out, or circumstances change.

When joint defaults may be worth challenging

Not every joint default is correctly listed. Some may be worth challenging if:

The account was not properly set up as joint

• You never signed a joint application or agreement
• Your signature was forged or you signed under pressure
• The joint liability was not clearly explained at the time
• You were added to an existing account without proper consent
• The credit provider did not follow their own procedures for joint accounts

The default process was not correctly followed

• Default notices were only sent to one address when both account holders had different addresses on file
• The required notices were not sent to both parties
• The timeframes for default notices were not properly observed
• The amount listed as defaulted included incorrect fees, charges or interest
• The account was listed as a default when it should have been recorded as disputed

Incorrect listing details

Even valid joint accounts can have incorrect default listings:

• Wrong default amount (should match the arrears at the time of listing)
• Wrong default date (should be when the account was actually closed or written off)
• Incorrect account type or credit provider details
• Default listed multiple times for the same debt
• Default listed under the wrong amount on your credit file

Identity or fraud concerns

If you believe the joint account was opened fraudulently:

• Identity theft may have occurred
• Someone used your details without permission
• You have no memory of the account and the signatures don’t match
• The account was opened at a time when you were overseas, underage, or otherwise unable to consent

What to check on your credit file

If you have a joint default on your credit file, check these details:

• Account opening date: Were you in a relationship, business partnership or living arrangement that explains the joint account at that time?
• Default amount: Does it match what you remember owing, or is it significantly higher due to fees and charges?
• Default date: Was this when the account was actually closed, or does the timing seem wrong?
• Credit provider details: Is this the correct company, or has the debt been sold to a debt collector?
• Your address history: Were you living at the address where default notices would have been sent?
• Other person’s details: If you’re still in contact, do they have the same default with the same details?

Documents to gather

• Original joint account application or agreement
• Correspondence about the account, especially separation of liability requests
• Default notices or final demands sent to either party
• Payment history showing who made payments and when
• Evidence of address changes that may not have been updated
• Correspondence attempting to resolve the debt or dispute the charges

Your rights with joint accounts

Even in a validly established joint account, you have rights:

Right to information

• You can request a copy of the original joint application
• You can ask for the account history and payment records
• You’re entitled to know how the default amount was calculated
• You can request copies of all default notices sent

Right to dispute

• You can dispute the default if the required processes were not followed
• You can challenge the amount if fees or charges were incorrectly applied
• You can request correction if the listing details are wrong
• You can dispute if you never agreed to joint liability

Right to separate liability

Some credit providers will consider separating joint liability after relationship breakdown, though this is not sought and usually requires both parties to agree.

Joint defaults and family law

When couples separate, joint debts often become a source of ongoing financial problems. Family law property settlements can allocate responsibility for debts between ex-partners, but this doesn’t automatically change the credit provider’s position.

Even if a court order says your ex-partner is responsible for the debt, the credit provider can still pursue you for the full amount if the account remains jointly liable. The default can remain on your credit file until the debt is resolved or the listing is successfully disputed.

Business partnerships and joint liability

Business partners who signed joint personal guarantees for business debts can find personal defaults on their credit files when the business fails. These defaults can prevent the individual partners from getting home loans, car finance, or credit for new business ventures.

Sometimes these guarantees were signed without proper legal advice or without understanding the personal liability being created. In other cases, the business debt was resolved but the personal undertaking was never properly discharged.

When both people want to dispute

Because each consumer’s credit file is their own, each person affected by a joint default needs to lodge their own dispute. One person cannot dispute on behalf of another, even in ongoing relationships.

This means:

• Each person needs to request their own credit file
• Each person needs to gather their own evidence
• Each person needs to lodge their own dispute with the credit provider
• Each person may receive a different outcome, depending on their specific circumstances

For couples or business partners working together, it’s often helpful to coordinate the evidence gathering and dispute strategy, but the actual disputes must be lodged separately.

What happens after a successful dispute

If a joint default is successfully disputed and removed from one person’s credit file, it doesn’t automatically get removed from the other person’s credit file. Each credit file is maintained separately.

However, if the dispute reveals that the original default was incorrectly listed (wrong amount, wrong process, etc.), this information can be useful for the other person’s dispute.

How Default Gone helps

Default Gone helps Australians challenge unfair, incorrect or unlawfully listed defaults. We collect the relevant information, prepare the dispute, lodge it with the credit provider and/or credit reporting body, track the response and explain the outcome in plain English.

The standard Default Gone service is $399 per consumer, per default (limited launch pricing — normally $399). There are no stage fees, no success fees and no surprise invoices. The fee covers the work performed, not a sought outcome.

For joint defaults, each person needs their own separate dispute service, as each consumer’s credit file is their own. We can coordinate with couples or business partners to ensure the disputes are consistent and well-supported by evidence.

Next steps for joint defaults

If a joint default is affecting your finance applications or causing ongoing problems, don’t just accept it without checking whether it was correctly listed.

Start by getting a copy of your credit file and checking the details against your records. If you can’t remember the account, try to reconstruct what was happening in your life when it was opened. Look for evidence that the joint liability was not properly established or that the default process was not correctly followed.

Joint defaults can be complex because they involve multiple people, ongoing relationships, and sometimes family law or business partnership issues. But many can be successfully challenged where the required processes were not followed or the listing is factually incorrect.

Disclaimer

Default Gone is not a law firm and does not provide legal or financial advice. We do not undertaking that a default or judgement will be removed. Outcomes depend on the facts, documents and response from the credit provider, credit reporting body or relevant legal pathway.

Frequently asked questions

Can I remove a joint default without the other person’s involvement?

Yes, each person can dispute their own credit file listing independently. You don’t need permission from the other account holder to dispute a default on your credit file. However, having their cooperation and any relevant documents they hold can strengthen your dispute.

Will removing a joint default from my credit file automatically remove it from theirs?

No, each credit file is maintained separately. If your dispute is successful, the default will be removed from your credit file only. The other person would need to lodge their own dispute to have it removed from their credit file.

What if my ex-partner caused the default but it’s affecting my credit?

Joint liability means both people remain responsible regardless of who caused the default. However, you may have grounds to dispute if proper default procedures weren’t followed, the amount is incorrect, or the joint liability wasn’t properly established. Family law settlements don’t change your liability to the credit provider.

Can I be added to a joint account without my knowledge?

Adding someone to an existing account as a joint account holder should require their consent and signature. If you were added without proper consent, this may be grounds to dispute the default. You would need evidence that you didn’t agree to the joint liability.

How long do joint defaults stay on credit files?

Defaults remain on credit files for five years from the date they were listed, regardless of whether the debt is paid. Both people affected by a joint default will have it on their credit file for the same period unless it’s successfully disputed and removed.

What if the joint account was for a business that failed?

Business debts with personal guarantees can result in personal defaults when the business fails. These may be worth disputing if the undertaking wasn’t properly explained, the business debt was resolved differently, or the default processes weren’t correctly followed for personal guarantees.

Do both people need to pay the debt to remove the default?

Paying a joint debt doesn’t automatically remove the default from either credit file. Paid defaults remain listed for five years. However, payment can sometimes be part of a negotiated settlement that includes removing or updating the default listing.

Can joint defaults affect business loan applications?

Yes, personal defaults appear on personal credit files and can affect business loan applications, especially for small businesses where personal guarantees are required. Business partners may find their personal credit history affects the business’s ability to get finance.

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