If you keep your finances separate, a Debt Management Plan is unlikely to affect your partner, even if you're living together.
If you have ever taken out debts in joint names, the credit reference agencies will probably have recorded “an association” between you. When lenders search someone’s credit file, they can see information about any associated individuals and may take their information into account when they are considering applications for credit.
If the credit reference agencies have recorded an association but there is no financial connection between you (or the financial connection has ended), either of you can ask for the link to be removed by completing a “disassociation” form.
Joint debts can be included in your Debt Management Plan, however the lenders may still chase your partner for the outstanding debt. This is because when you take out a joint loan with another person, you’re both liable for the full amount.
What if we live together but don’t share finances?
When your debt management payments are being calculated, your partner's finances may be considered. They won't be expected to make contributions to your debt, unless they are jointly responsible for it, but we will take account what they pay towards your shared living costs when we look at how much you can reasonably afford to pay towards your debts.
A debt advisor will review your entire household income and expenditure details, if appropriate, to see how much disposable income you have after your priority costs and day to day expenses have been covered. Any remaining income is classed as disposable income and should be paid towards your plan.
What if we share finance?
If you have joint finances – such as a loan or bank account – then both of your finances should be taken into consideration when looking at the most suitable solution for you. As such, there may be an impact on both of your credit reports.
If all of your debts are in both names, you’d both be responsible for paying back all the debts. You could enter into a joint Debt Management Plan. We would look at your joint household income and expenditure and work out what you can realistically afford together, once you've covered all your other essential living costs.
If you have some joint debts and some single debts, you'd both be responsible for paying back the joint debts, but you'd be solely responsible for repaying your single debts. You can enter into a joint Debt Management Plan, but you may prefer to have individual plans so you're each paying a fair and proportionate amount towards the debts that belong to you.
Debt is a complicated subject, so speak to us about your situation and we’ll be able to offer advice and help for your individual circumstances.