Creditors cannot demand information. It is their responsibility to prove that you owe money. They may request you fill in an income and expenditure form. This might be in your interest to do so if you genuinely can’t afford to pay. This article explains how to complete expenditure forms for debt management.
You may also find this article on completing bankruptcy forms useful.
Do I have to declare my partner’s income?
You are not obliged to provide any information to them about your partner or spouse, but failing to do so may have consequences to how you deal with your debt. An incomplete financial statement may simply cause them to reject it. They will then continue adding interest, charges or pursuing by other methods. A financial statement is a means of your partner asking the company for help. It illustrates why it is not possible to pay more money than the amount offered.
Everyone has priority bills to pay, the essentials for daily life such as the roof over our heads and the food on the table. The financial statement shows a creditor why they cannot have all of the income that someone has. The offer of payment is the amount left over after paying for all the essential bills.
Providing a financial statement that does not fully reflect the household situation can often result in creditors refusing to help. They are not able to see from the information provided that the person is, in fact, making their best offer of payment towards the debt.
They are not expecting your partner to pay towards your debts. But do want to see that you are not paying for someone else’s bills rather than paying the debt. It can also be very difficult for a household when someone makes an offer of payment towards their debts that is really too high for the household to maintain.
If you want an independent financial statement drawn up any of the free debt advice charities can help. They will be able to help come to a reasonable arrangement to pay that your household can manage. Debt charities will also be able to help with any worries or concerns you may have.
How do I know how much money is available for repaying debts?
When trying to work out the amount of money that is available to pay towards debts the starting point is always the same. The preparation of a financial statement. Looking at a breakdown of the income that comes into the household. As well as the daily living costs that need to be set aside for, or paid. Then the debts are listed.
The Financial Statement should show all of the income and then show why it is not all available to pay towards debts.
Perhaps the most common example of this is Housing Benefit payments. A household may receive £250 a month in housing benefits and this would be listed as income. In the expenditure list for the household, it will show rent as an outgoing. This is really saying to a creditor “Yes I do receive this extra income of £250 a month benefit but it is not available to pay to my debts, it is not savings or spending money.
As you can see in my outgoings this is the money that I receive to cover some of my rent”
So the answer to the question is that it should always be included in the financial statement, as it does exist, but the outgoings should accurately reflect where the money is needed by the household. Therefore the money that is left over is the amount available to pay towards debts.
Rather than going through a financial statement with a debt collector, whose main interest is in recovering the debt, it may be best to contact a free debt advice charity and prepare a financial statement that accurately reflects your household situation.
Applying for a CCJ? Take a look at our article on completing your CCJ forms.