Rebuilding Your Finances After Financial Abuse
Financial abuse occurs when a partner or caregiver takes control of your money and how you spend it. In this article we focus on how to recover financially including how to get help, where to go for legal advice, the benefits of checking your credit record and new financial goals.
The effects of financial abuse can be devastating; it can leave you feeling trapped, lonely and isolated. And, with limited access to money or mounting debts, you may feel that you’re unable to leave the partner, family member, friend or carer who has harmed you.
However, with the right help and support it is possible to move on, regain your financial independence and work towards meeting new financial goals, such as qualifying for a mortgage on a new home.
What is financial abuse?
Financial, or economic, abuse is a type of domestic abuse and can take many forms. It may be that your partner asks you to explain every penny you spend or they stop you buying things you need. They may try to limit your access to your own accounts and, in extreme cases, put all the household bills in your name or take out credit cards or loans using your details.
Alternatively, a partner that wants to limit your financial prospects may stop you working or going to university. During the coronavirus pandemic they may make it tricky for you to work from home, stop you using laptops and mobile phones, or refuse to support you with childcare or mortgage payments. On a cold day they may not let you put the heating on.
According to the charity Surviving Economic Abuse (SEA), as many as one in five adults in the UK has suffered financial abuse by a partner and there’s a strong link with domestic violence too.
SEA’s research found that 50% of women who suffered physical abuse from their partner had been forced to take out a loan or put something on credit against their wishes.
It’s important to know that financial abuse is a crime. Perpetrators found guilty of ‘coercive or controlling’ domestic abuse can be imprisoned for up to five years.
It’s difficult for others to understand how hard it is to move on from financial abuse. However, there are numerous organisations that can help with securing your short-term safety as well as setting you on a path to long-term recovery.
This can include the police, solicitors and domestic abuse charities.
Nicola Sharp-Jeffs, CEO of Surviving Economic Abuse, says: “As a first step we would always recommend that people are in touch with a domestic abuse charity to get some holistic and emotional support, in addition to working out the practical side of things.”
These charities may be able to help:
- Women’s Aid: The domestic abuse charity for women may be able to recommend a suitable local solicitor. It also offers advice for ensuring your partner does not find out you are seeking help online.
- Refuge: This women’s charity runs a 24-hour national domestic abuse helpline on 0808 2000 247.
- Men’s Advice Line: Men can contact this charity for support on 0808 8010 327 or visit online.
- Galop: If you are in the LGBT+ community, you can contact this organisation, which offers a national lesbian, gay, bisexual and trans+ domestic abuse helpline on 0800 999 5428.
- Surviving Economic Abuse: It offers a huge amount of practical information on its website to help you de-link from your abuser. It also offers access to the Financial Support Line in partnership with Money Advice Plus. It can be contacted on 01323 635 987.
All of the above sites also have ‘quick exit’ tabs that enable you to shut down the site quickly if your partner walks into the room.
Get legal advice
Natalie Wiles, a chartered legal executive in the family law team at Langley Solicitors, says it’s important to get legal advice at the earliest stage possible, preferably before you exit the relationship.
She says: “There may be wider financial claims as a result of the relationship, particularly where you are married or own property. There are also protective measures, such as lodging restrictions against a property, or freezing assets, which can be considered, where appropriate, to prevent assets being sold by the other person.
“Speaking to a lawyer will help to alleviate uncertainty and provide bespoke guidance for your own situation, both in relation to finances and matters relating to any dependent children.”
Although legal advice can be expensive, if you can provide evidence that you cannot afford solicitors’ fees and are experiencing domestic abuse (including financial control) you may be eligible for legal aid.
Gather your paperwork
Making a fresh start can be easier if you have certain documents to hand. Before you leave your partner, gather your passport and driving licence, birth and marriage certificates, your national insurance number, bank statements, pay slips, tax documents, any credit card bills and household bills.
Don’t worry if you can’t find them all. If you are opening a new bank account, for example, they may accept alternatives such as a letter from a social worker or refuge.
Talk to your bank
Your bank or building society may also be a source of support.
If it has signed up to the UK Finance code of practice for financial abuse it will have specialist staff trained to provide the right support. This could include practical advice around opening a new bank account and how to keep it secure, as well as how to manage – and potentially close – joint accounts.
To ensure your partner doesn’t see your bank statements, you can ask your bank to stop posting them or provide an alternative address for all communications.
To make the process easier for you, banks and building societies that follow the code should offer you a private place to talk if you are in a branch and log all details to ensure you don’t have to keep repeating your story.
You should think about any credit cards you have too. Although you and your partner may both have a card on the same account, only the primary cardholder is liable for the debt. That means if you’re the primary cardholder you can cancel your partner’s card so they can’t rack up any more debt. If you’re the secondary cardholder it means you’re not liable for the bill.
Keeping your benefits
If you are claiming benefits, you may be worried about how to keep them if you leave your partner – particularly if you have children to support.
Universal credit to couples is usually paid into one bank account, so if you are concerned that you will not get access to this money after you leave, talk to Jobcentre Plus. It has trained domestic abuse advisers who will be able to ensure payments are either made to you, or split between you and your partner.
Alternatively, report any changes on your online universal credit account or via its helpline on 0800 328 5644). You can also use the journal facility on the online account to state you are experiencing financial abuse.
Check your credit record
People who experience financial abuse may be in the dark about their financial affairs. For this reason, it’s vital you check your credit record.
Joanne Leek from the Ipswich Building Society said in an email: “The first, most important step to rebuilding your finances is establishing all credit agreements you are named on. Even if you don’t make these payments yourself or have an informal arrangement in place, if your name is in the contract – whether that be rent, utility or phone bills – you’re still financially implicated.”
She adds: “Crucially, your credit report will also highlight other individuals you may be linked to. If you’ve ever applied for finance with your ex-partner, for example, for a credit card or mortgage, you’ll become automatically linked to this person, meaning their credit report could be taken into consideration for any future applications you make. Essentially you become guilty by association, regardless of whether you are in a relationship or not.”
You can check your credit record free of charge online with a credit reference agency. There are three in the UK: Equifax, Experian and TransUnion, but they may contain different information so it makes sense to check each one.
However, Sharp-Jeffs of SEA says it’s important to exercise caution and not update any credit records without seeking specialist advice from an organisation such as Money Advice Plus. “It may be that in updating your address on your credit report your abuser sees it if they check their report, because you’re linked to them.”
Although joint debts will need to be repaid, after these have been cleared you can ask the credit referencing agency for a ‘notice of disassociation’ which shows that you are no longer financially linked. The rules are more relaxed for mortgages and you can request disassociation before they have been repaid if you have been living apart for six months.
Once you have been ‘de-linked’ in this way, your ex’s borrowing habits will no longer have an impact on your credit record.
What about repaying debts my partner took out in my name?
It can be harder to move on if you are being forced to manage debts you either didn’t know you had, or were coerced into taking. However, that doesn’t necessarily mean you need to be stuck with them – if you were coerced into borrowing the money you may be able to request that the debt is written off. Alternatively, with the help of a solicitor, you may be able to challenge your liability for the debt.
It’s also worth knowing that while you go through this process you can prevent your partner from borrowing any more money in your name by adding a ‘password notice of correction’. This will mean lenders will have to check this password with the applicant before agreeing to any credit.
Separating your financial commitments
The Surviving Economic Abuse website has a downloadable ‘de-linking’ checklist to help you separate all your joint financial commitments.
How quickly you can do this and regain your financial independence will depend on the scale of the abuse and in some cases your ex’s willingness to cooperate. However, with the right advice and support, it is possible.
Once you have fully de-linked from your partner and all of your income is being paid into an account that only you can access, your financial future will be back in your hands.
But if you are still struggling with debts, you may benefit from seeking specialist debt advice from a charity which may be able to negotiate with creditors on your behalf.
Will I ever be eligible for a mortgage?
In order to qualify for any credit, whether that’s credit cards, loans or a mortgage to buy your own home, you will need to demonstrate to lenders that you can afford repayments and have a reliable credit history.
This can be tricky for those who’ve experienced financial abuse and have had problems with debt, but it’s by no means impossible.
David Hollingworth, associate director communications at L&C Mortgages, said in an email: “Moving on from financial abuse could be hindered by the marks it leaves on credit history where debts were taken out and payments missed.”
However, once you have separated from your partner and have control of your own income you will be in a much better position to improve your credit record.
By making regular repayments on credit cards or other debts, you can improve your credit score and, should you want to take out a mortgage in the future, it will demonstrate to lenders that you are a responsible borrower.
Hollingworth said it’s also important to note that you can add explanations to any ‘blips’ on your credit record: ”Where there are problems showing on the file it may be possible to flag the reasons for the issues. The hope is it will help a lender to understand the background when reaching a decision, and they will approach the situation sympathetically.”
He adds: “Time will also help, and the longer that things can be seen to be back on track, the more likely it is that there will be a potential solution to move forward.”
When you are ready, advice from a mortgage adviser may also be a big help as they will know which lenders are most likely to consider your application.
Joanne Leek says: “If you’re worried about being accepted, approaching a lender who operates a manual underwriting system could be beneficial. This involves the bank or building society looking at your individual circumstances to reach their decision, rather than relying on a computer algorithm.”
Although you might question the degree of support you could get from lenders, Sharp-Jeffs says banks and building societies have made huge strides in this area and the key is to be open and honest about your situation.
Sharp-Jeffs says: “All is not lost. If you wanted to take out a mortgage and have a conversation with a particular bank, the more information that you can provide to them, the better.
“People can have feelings of guilt and shame or feel stupid but that isn’t the case. They will recognise that it wasn’t your fault and that you were in a context of coercion and control – it’s no reflection on you as an individual.”
What if I am worried about a friend?
It may be that you’ve noticed a change in a friend or a family member since they moved in with their partner or began to use the support of a carer. Maybe they are constantly making excuses not to come out and are saying they can’t afford it, even if you know they have a good job or typically stable finances.
It’s not easy questioning someone’s situation, however, if you are concerned they could be experiencing financial, or any other abuse, there are still ways to help. Any domestic abuse charity or helpline will be able to offer you advice. Alternatively, look at the Bright Sky app or website – it highlights red flags for spotting domestic abuse for worried friends and family members and offers a directory of support services.
It can be difficult to leave an abusive situation, but those who are trying will find it easier with the support of someone standing by their side.
Image Source: Getty Images
Rachel Lacey is freelance journalist with 20 years experience. She specialises in personal finance and retirement planning and is passionate about simplifying money matters for all. Read more