If you are doing a joint Debt Management Plan (DMP) and your relationship breaks down and you decide to split up, we consider what happens to your Plan and what the options are.

A joint Debt Management Plan manages two people’s debts at the same time. Generally both parties income and expenditure budgets will be combined to create one disposable income amount which is then divided across all the creditors in the plan.

The Plan can work extremely well while a couple remains together. However if they decided to split up the plan generally becomes unworkable. We explain the options open to you in this situation.

You can stop paying a joint DMP at any time

One of the key features of a DMP is that it is an informal arrangement. It can be stopped or changed at any time by simply cancelling the monthly payments. There will never be any cancellation charges.

However you must remember that if you cancel your Plan your debts will still exist and you will need to decide how to manage them going forward.

Alternatively you can decide to keep your joint debt management plan running even though you have decided to split up. You both simply have to continue to pay into it.

You could decide to reduce the monthly payments into the plan if they are now too much to afford based on your new financial circumstances.

Is a DMP still right for you if you split from your partner?

If you have both decided to go your separate ways it is normally best to stop your joint DMP. Given that your personal financial situation has changed you should now carry out a review of your financial situation and consider whether starting a new Plan on your own is the best thing to do.

You should complete a new income and expenditure budget for yourself and decide how much you can personally afford to pay towards your debts on your own.

You can then decide on the best debt solution for you. This might be a new DMP for just your debts or an alternative solution such as an Individual Voluntary Arrangement or perhaps Bankruptcy. It is worth considering all the options at this stage.

Are you trying to decide if a DMP is still the right solution for you? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

What happens to joint debts if you split during a DMP?

If you and your ex partner have joint debts you need to remember that your are both jointly liable to repay these and you will not normally be allowed to just pay your half. AYou will need to include 100% of any joint debts in your new debt management solution.

The bank who is owed the money is at liberty to chase you both for payment of the outstanding debt. However they will generally pursue the person they have contact details for. If this is you and you want to ensure that your ex partner shares the responsibility for repaying the debt, you must also inform the bank of their whereabouts.

However this might not be sufficient for the bank to take action against them. If you start a debt management plan including any joint debts, you may find that the bank makes little or no effort to chase your ex for the debt even though they are also liable because they already have a plan agreed with you.

The only real solution to this is to chose a different debt management solution such as an IVA or bankruptcy where you are only obliged to repay as much as you can within a set time scale. If after this there is still joint debt outstanding, it is far more likely that the bank will try and chase your ex for it as they can take no further legal action against you.

Debt is not a good reason to stay in a bad relationship

If your relationship has broken down and you want to leave your partner you may feel pressured into staying because you have a joint DMP. However this should not be the case. If necessary it is easy to stop a joint Plan by simply cancelling the payments.

However, you must remember that you are still personally liable for debt in your name and any joint debts and your creditors are likely to restart their collections activities against you to enforce repayment.

As such you need to be prepared to make a plan of action to deal with your debts from now on. You should review your new personal circumstances and decide on the best solution for your new circumstances.