If I pay off debts from my redundancy will it affect any benefits?

suelees1

pstuart wrote: »

If a claim was to be made for just HB (slightly off subject here), are the LA's forms less 'intrusive' than the DWP?

No they're not

moose1982

I think it would depend on how much money we are talking about. When I was made redundant, I also sold my car (I didn't need an Audi A3 if I wasn't going to use it as much) and then used all that money to pay off my debts and leave me with about £3k in capital. When I had to explain my bank statements to the JC+, it was a bit of a 'umm' and 'ahh' moment before it was cleared as fine. I guess if you can be transparent with what you are doing and it isn't huge amounts, then you may be ok, again, it could depend on who you see.

zzzLazyDaisy

Just to clarify -

A debt is only classed as a debt, when it is actually due and payable.

So even though a person might have borrowed £10k, if the agreed repayments are (say) £100 a month, then the only part of the debt that is due and repayable is £100 as it comes round each month. If the debtor were to clear the loan and then claim means tested benefits that would be viewed as deprivation of capital.

On the other hand, for example, if the person is being chased by debt collectors for an unpaid load, or threatened with a CCJ for monies owing, then it would not be considered deprivation of capital to pay those debts, because they are immediately due and payable.