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Tackling your debts

What’s a joint income and expenditure statement?

Posted 12 October 2016 by Christine Walsh

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Learn what a joint income and expenditure form is and how it could help you deal with your debts.

People often have a lot of questions about debt solutions when they approach us for advice. And there may be even more things to consider if you’re in a relationship and you share your finances with your partner.

In this blog, we’re going to explore what an income and expenditure statement is, and why you may need to provide a joint one for you and your partner, if you start a debt solution.

 

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What’s an income and expenditure statement?

An income and expenditure statement is a document which shows all the money that comes into your household, including wages and benefits, and all the money going out of your household as well. Because it covers everything you spend your money on, it will show exactly how much you can put towards your debts each month.

If you were to give one of our advisors a call, they would need to ask you some questions about what you spend on each area of your life. The aim is to be as detailed and accurate as possible, so this will include things like your rent/mortgage, food, utility bills, travel, childcare, insurance, clothes, socialising and your mobile phone bill.

Your expenditure figure is then taken away from your income figure, to find out what’s left over. The amount left over is known as your disposable income, and this is what you’ll be expected to put towards your debts.

A debt solution either involves you lowering your monthly repayments or suspending them, so it’s very important that your income and expenditure statement is correct and sent to your creditors, so they have a better understanding of your situation.

Why do I need to produce a joint one?

As we said, when you put an income and expenditure statement together with your debt advisor’s guidance, it’s really important that it’s an accurate reflection of what’s happening with your money. Living with your partner and sharing finances with them will affect how much you can pay towards your debts, and this is why the creditors will need to see this information.

For example, your partner may be paying towards the mortgage and other living costs and this will allow you to put more money towards your debts. So in most cases, the creditors will want to see a joint income and expenditure and your partner will be asked to sign a consent form so that their information can be shown.

Will my partner need to put money towards my debts?

It’s important to point out that your partner won’t be expected to contribute towards your debts on a debt solution. You just need to provide information about how they contribute to the household, so that your debt advisor and creditors can see how much you can afford.

You don’t need to worry about your partner being left to pay everything else because you’ve started a debt solution. Your payments are worked out so that you can afford to put something towards your debts and still help your partner with the essential costs of running your home.

There’s debt help out there

If you’re struggling to afford everything because of your debts, make sure that you reach out for help. You can use the options at the bottom of this page to get in touch with one of our trained debt advisors. They can help you put together a comprehensive income and expenditure statement and can also tell you which debt solution, if any, is right for you. Once a solution is up and running, there might be fees associated with it, but the initial advice they give is always completely free.

There are also downsides to starting a debt solution that you need to be aware of before you start one. For instance, any debt solution will appear on your credit file for six years from the date that you start it. If the solution itself happened to last longer than six years, it would stay there for as long as the solution was ongoing.

This means that any lenders that happened to check your credit history would be able to see the debt solution and this may affect their decision, or mean that you have to borrow at a higher rate of interest.

It’s essential that you understand both the pros and cons of a debt solution before you go ahead with a plan to repay your debts. That’s why you should have a conversation with a trained debt advisor first and explore all your options.

 

 

 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.