Does my Partner have to pay my Debt Management Plan?
If you are considering a Debt Management Plan (DMP) you will need to understand what affect this will have on your partner. If you are sharing a home with a partner you may have joint financial responsibility for the household expenses. They may even be jointly responsible for some of your debts. Given this if you start a Plan you will want to understand if they will have to make payments towards your debts.
Does your Partner have to help you pay your Debt Management Plan?
If you start a Debt Management Plan your partner is not under any legal obligation to help you pay your debt. No-one else can be forced to repay your debts other than you. As such when you are negotiating with your creditors you are not obliged to give them any information about your partner’s income.
Having said that if you are living together and your finances are linked perhaps because you use joint bank account it is often best to calculate a household surplus income using the total of both your incomes and the full household expenditure.
This does not mean that your partner has to pay towards your debts. The amount you pay into your Plan can still just be based on your share of the surplus income alone (based on the percentage of the total income you are contributing to the household). Your partner is free to keep back their share to use for whatever they wish. It does not have to be paid into your Plan.
How are Joint Debts affected by my Debt Management Plan?
If any of your debts are in joint names with your partner this will add an additional layer of complication if you want to start a Debt Management Plan. The reason for this is that both of you are responsible for repaying 100% of your joint debts. You have joint and severable liability.
If you start a Plan by yourself this will not protect your Partner if you have joint debts. These debts will fall into arrears when you start the Plan and as a joint account holder your Partner will then become liable for the outstanding amount. Unless your Partner is able to keep up the normal payments themselves the creditor can take action against them to recover it
If they are unable to make these payments from their income there are normally two possible solutions. Firstly you could try and keep the debt out of your Plan. However this is not easy as you would need to maintain the full payments towards it. Alternatively you could both start a Joint Plan.
Can my Partner help me pay my Debt Management Plan if they want to?
There is nothing to stop your partner helping you to pay your Debt Management Plan if they want to. In fact if they are prepared to do this it will normally be of considerable benefit to you. It will mean your debts will be repaid faster and your Plan will be completed sooner.
However there is a different way in which your partner could help which might be even more beneficial. Rather than simply adding to your Plan payments they could save their share of any disposable income. Once they have saved a sufficient lump sum you could use this cash to make settlement offers to your creditors.
In return for a lump sum payment your creditors may agree to write off up to 50% of what you owe them. As such if your partner can help you make these cash offers with money they have been able to save it will significantly accelerate the time it takes you to become debt free.
Do I have to tell my Partner about my Debt Management Plan?
If you are in debt and struggling financially you may not be ready to share this with your partner. In this situation you can start a Debt Management Plan without telling your partner if you wish.
Generally speaking the only time that you will need to speak to your Partner is if you have a joint debt and you need to include this in your Plan. Clearly there is then a risk that the creditor will contact your partner directly about the unpaid debt.
DM4U Tip: Being honest and telling your partner about your situation may ultimately be the best way to handle a debt problem. If they are aware of your situation they may be able to give you the support you need to resolve your debts whether this is moral or financial.
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