What is Joint Liability?
How Does Joint Liability Work?
Joint liability is best illustrated by two married people who apply jointly for a credit card to maximize the amount of money they can borrow. If the credit card company approves their application, both spouses are responsible for any balance charged to the card. Should one spouse default on payments, the other is still liable for the full amount.
In a business partnership, joint liability includes a shared responsibility among all partners for damages, injuries or any outstanding debts. In other words, if a court finds a partnership at fault in a lawsuit, all compensation payments are the responsibility of all partners.
Why Does Joint Liability Matter?
Individuals seeking joint liability for credit must be aware of whom they choose to participate in a joint liability, because debts incurred by any one party become the obligation of all parties. Likewise, a partner in a partnership firm must be aware of any illegal or suspicious activities hold the other partners accountable, because all partners suffer the consequences if the firm is prosecuted and punished.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
For more than a year, my family has sought a bigger home in our suburban Dallas neighborhood. Now that the kids are older, we're ready for a pool, a different layout and a fifth bedroom for my...Read More →
The cost of tuition has skyrocketed in the last 30 years. According to Bloomberg, college tuition fees have jumped more than 13-fold since...Read More →
You've probably heard his popular catchphrase, "You're fired!" The Donald has long been a bombastic figure on the American financial scene. He is a well-known real...Read More →