A Debt Management Plan is not a legally binding agreement. However while setting one up you may still be asked to provide some paperwork.

In this article:

• The paperwork required to set up a Plan yourself
• What if you use a Debt Management Provider?
• Will your Plan be Rejected if you do not provide the paperwork?

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The Paperwork you will require if you Set Up a DMP Yourself

There is nothing to stop you negotiating your own DMP with your creditors. To achieve this you will have to submit a written financial statement showing information about all the people you owe money to, your income, your living expenses and the assets you have.

It is unusual but your creditors might also ask you to provide proof of the financial information you give them. This may include proof of your wages such as a copy of a recent wage slip and certain elements of your living expenses which could be proved with a recent bank statement.

BMD Tip: You are not legally obliged to provide this evidence to your creditors. However if you chose not to do so it might mean that they are less likely to agree your reduced payment offer and continue to take collection actions against you.

What paperwork will be needed if you use a Debt Management Provider?

If you decide to use a debt management company to help you will have to submit a written financial statement. Normally the company you are working with will help you complete this.

The company will ask you to provide up to date statements or balances for each of your creditors so that they can verify the amounts that you owe and also the account numbers.

They will normally also ask you for a copy of your last three months wage slips to prove your income and also a copy of a recent bank statement so that they can make a reasonable verification of your living expenditure. They may also ask for proof of major expenditures such as a rent or mortgage statement

In the same way as if you were negotiating Plan yourself you are not legally obliged to submit this information. However by doing so it will help the debt management company make sure that sufficient money is included in your living expenses budget to pay for all of your expenses and that your monthly payment is not set too high.

Will your Debt Management Plan be Refused if you do not provide the Required Paperwork?

If you want to start a DMP at the very least you will be expected to provide a full written statement of your financial situation. It will not normally be enough to tell your creditor that you cannot pay and simply offer them less without evidence of why this is the case.

If you refuse to provide a financial statement then it is very unlikely that you will be able to agree DMP payments with your creditors.

In addition to a financial statement, your creditors or debt management company may well ask you to provide some proof of the information you have given. At the end of the day you are not legally obliged to provide this. However if you choose not to, then negotiating with your creditors may be more difficult and they may refuse to support you by freezing interest and late payment charges.

In addition if you are working with a debt management company providing supporting evidence of your financial affairs will help them ensure that you are not paying too much into your debt management plan and may also help them identify whether an alternative solution might be better for you.