Housing benefit after house sale forced through divorce?

patch2000

Hello
If I am forced to sell jointly owned house during my divorce
can I pay my relative back their equity investment and qualify for Housing Benefit for myself and child? I know you are allowed 16,000 savings but don't know if this would be allowed- it was a genuine loan (though nothing on paper) so not an evasion

theartfullodger

Nothing on paper?? I would assume (nay, expect..) the authorities would treat any such payment to someone else with no evidence there being a debt as "deprivation of assets"...

Could you perhaps see that some might wonder if this relo would perhaps just be "looking after" the money so that you could get the benefits.....

If it was a loan I guess you could prove it was by pointing out you declared it a loan when making an application to whoever the mortgage was with - that would be "on paper"..

£10k is a very round number - if equity investment presumably that was as a % share/value-when-sold of the property not as a lump-sum ...

patch2000

Yes of course it could be seen like that, which is why I am asking the question. As well as deposit (which was a %) over the years he helped with lots of debt so it is to repay that too which wasn't clear in original post- didn't mention 10K.

theartfullodger

Apologies about the £10k, my bad.

tim123456789

In theory you can, but without having it in writing it will be difficult to prove.

(why oh why do people do these things without documenting it properly!)

tim

patch2000

Yes true but there are many things that were unexpected like family helping with debt and of course divorce- not things to plan for.....

JimmyTheWig

To me it sounds more likely that someone would want to pass on a large amount of money to a relative to be then able to claim benefits than someone would lend a relative a large amount of money without anything being documented on paper / email / etc.

I would think that without any evidence they would assume that you are lying and your claim would be turned down.
Do you have anything to show where the money came from. E.g. bank statements (either, or ideally both, of you) showing it being paid in / paid out?

patch2000

Yes I have bank statements on both sides plus evidence of debt, and it was a situation where a number of smaller sums over the years accumulated in a large sum- again not planned, more emergency measures at the time.

if I am forced to sell which is highly likely I'd want to give that back and then survive as a single parent on a low income.

TeamLowe

I'm not sure, you'd be better checking on the benefits board, but i've seen over there people mention that if you can't pay off lump sums then claim benefits without them looking into it-if you have a debt you have to pay it at its monthly rate.

JimmyTheWig

patch2000 wrote: »

Yes I have bank statements on both sides

So it would be quite easy to show that this relative gave you a substantial amount of money to help you buy the house?
E.g. their bank statement shows a significant amount of money going to you and your bank statement shows a significant amount of money coming from them in the weeks/months leading up to you buying a house. Then your bank statement shows a similar amount of money, or more, going to the solicitor to pay for the house?
If so, I think it would be reasonable to see that this money was given to you to buy the house. And I think it would be reasonable to say that your relative would expect this money back once the house was sold, even without a written contract.
Obviously if there is any evidence to the contrary (e.g. you told your solicitor and/or mortgage company that the money was a gift or that it was your money, etc) then that might go against you.
Was it a close relative? Do you _honestly_ think that it is reasonable for that relative to have lent you a substantial amount of money and expect to get it back without any written agreement?
Any emails or anything from the time confirming this?

plus evidence of debt, and it was a situation where a number of smaller sums over the years accumulated in a large sum- again not planned, more emergency measures at the time.

I don't see that there is any reason for this to be repaid from the money from the house sale. If the divorce doesn't mean you have to sell the house, how will you repay this debt? Unless there is a significant paper trail I don't see it as reasonable that your relative would expect this debt to be repaid by the sale of the house.
I think it would be reasonable for this debt to be repaid over time as you can afford to.

if I am forced to sell which is highly likely I'd want to give that back and then survive as a single parent on a low income.

Of course you would. But that only works if you can survive on low income. If you can't, and you would need benefits, then it's not as simple as that.

theartfullodger

tim123456789 wrote: »

I...
(why oh why do people do these things without documenting it properly!)

..

Usually because (clearly not in this case...) someone is on the fiddle, possibly both people...

Sometimes because they trust each other (Arrrrgggghhhhhhhhhhhh...)

Cheers!