Deprivating Of Capital??

Jowo_2

Work through those HMRC pages to understand the guidance given to Decision Makers when they review your situation.

If a person uses capital to repay a debt, the decision maker should consider carefully whether the debt had to be repaid at this time. If there is no legal obligation or pressure to repay the debt now, part of the purpose may have been to get benefit or more benefit.

http://www.hmrc.gov.uk/manuals/dmgmanual/html/DMG41001/09_0204_DMG45038.htm

Applicant's or partner's have no choice if they use their capital to pay
1) for the necessities of life, such as food and fuel or
2) debts which are

• immediately repayable and

• legal debts capable of enforcement1

http://www.hmrc.gov.uk/manuals/dmgmanual/html/DMG41001/09_0212_DMG45046.htm

Applicant's or partner's have a choice if they
1) give their capital away
2) spend their capital extravagantly or imprudently even if they say they have used it to pay for the necessities of life
3) pay back a debt before the agreed date, such as when they pay off their mortgage and the agreement says it is not due to be repaid for another 15 years
4) pay more than the amount due on a debt , such as when they pay more than the minimum payment on a credit card debt
5) pay back a debt which is not legal and incapable of enforcement


In England and Wales a legal debt capable of enforcement is one which is recognised in law as having legal effect. It can be created in a variety of ways such as

• by a court judgement

• an instrument under seal

• a deed

• a contract to pay.

http://www.hmrc.gov.uk/manuals/dmgmanual/html/DMG41001/09_0214_DMG45048.htm
http://www.hmrc.gov.uk/manuals/dmgmanual/html/DMG41001/09_0213_DMG45047.htm

DaisyFlower

JustMe** wrote: »

I dont want to get in trouble thats all but I want to pay off my debts and buys things to make mine and my sons life more comfortable

Thats fine but you need to use your own money not tax payers - £20k should easily last 18 months/two years if you are careful - if you want to save some of it or buy luxurys you could work and then the capital would be your own as you wouldnt need benefits.

michaels

Would this allow you to stop making payments on any debt so that it became in arrears and thus immediately payable and use this to then justify using capital to pay the debt?

Robbie64 wrote: »

If debts are at the default stage then paying off those debts in order to avoid a court case and any subsequent bailiff action would not be seen as deprivation of capital. It is reasonable for these bills to be paid.

dmg24

michaels wrote: »

Would this allow you to stop making payments on any debt so that it became in arrears and thus immediately payable and use this to then justify using capital to pay the debt?

No, that would clearly demonstrate an intention to deprive yourself of capital, as well as wrecking your credit rating.

michaels

Not at all given my sharply reduced income making ends meet would result in a choice of either buying food for my kids or servicing my debts so not surprisingly I would get in to arrears...and obviously I would probably fold at the first threatening letter demanding full repayment rather than waiting for a CCJ!

dmg24 wrote: »

No, that would clearly demonstrate an intention to deprive yourself of capital, as well as wrecking your credit rating.