After I've sold house, question about HB

Norfolk_Jim

Hi, after several years struggling and with my wife's health deteriorating I'm at a point where I can no longer afford my house and my debts, should really stop work and care for my wife full time but am trapped by my debts. I'm thinking of selling my house as there is enough equity in it to pay off the mortgage and all of my debts. I would then need to rent somewhere to live.
Looking at local rentals, the monthly payments are much higher than I pay now so any capital I had left after I paid my debts would soon be gone paying the Rent.
What I need to learn about is what to do when any left over capital has been spent on rent. Is there anywhere I can go for advise about this - CAP maybe?

kingfisherblue

I believe that any proceeds from a house sale are only ignored for benefit purposes if they intend to use the money to buy another house, and this is time limited (six months, I think). If you intend to rent, then any money that you have will not be ignored, and will be used to calculate whether you can receive any means tested benefits.

calleyw

there is also a possiblity if you pay off any debts in full that are not due you could be counted as still having the money.


https://community.scope.org.uk/discussion/37501/is-paying-off-a-credit-card-intentional-deprivation-of-capital


Yours


Calley x

Norfolk_Jim

What do you mean by "are not due" please?

Carrot007

Norfolk_Jim wrote: »

What do you mean by "are not due" please?

As in paying more than the minimum payment requested.


Which means it is better to default so full payment is requested for purposese of future benefits.


I don't think there is a definate rule however so it juts comes down the the whims of whoever investigates. Quite silly really paying of debt should be encouraged. It's hardly wasting the taxpayers money by making someone default later when they have no savings to pay of debt anymore.


So it likely comes down to whether you are likely to get an income to pay things off in the future. But again with no definitive guide, who knows.

Mojisola

Norfolk_Jim wrote: »

Hi, after several years struggling and with my wife's health deteriorating I'm at a point where I can no longer afford my house and my debts, should really stop work and care for my wife full time but am trapped by my debts.

Have you talked any of the free debt advisors like https://www.stepchange.org

calleyw

Carrot007 wrote: »

As in paying more than the minimum payment requested.

That is correct. So credit cards you just keep paying the monthly amount and not pay it off in full.


The link I provided contains a lot more info in more detail.


Yours


Calley x

pmlindyloo

If you are absolutely certain that this is the way forward i.e you have received advice from CAP, CAB, StepChange then the first thing you need to do is find out if you are in a full Universal Credit area. USe this link:

https://www.citizensadvice.org.uk/benefits/universal-credit/before-you-apply/Check-if-youre-eligible-for-Universal-Credit/

The reason for this is that with Universal Credit you would be allowed to pay off your debts and still be eligible for Universal Credit.

If you do give up work to care for your wife then it is vital that you get some advice about your financial situation after your savings fall below £16000.

Even at the moment it would be sensible to get some advice from CAB/Welfare advisor to see if your wife is eligible for PIP.

If awarded PIP then you could claim Carer's Allowance and still do a little work.

Neither PIP not Carer's Allowance take savings into consideration although Carer's Allowance has rules about how much you can earn each week.

Having had a quick read of your previous posts you are obviously in a very difficult situation and I do feel that you would benefit from some advice both about your debts and any benefits you may be eligible for.

calleyw

pmlindyloo wrote: »

The reason for this is that with Universal Credit you would be allowed to pay off your debts and still be eligible for Universal Credit.

Did not think all areas had gone live with UC. If not then he is hampered by what we said


So the OP needs to be very careful and check everything before he does anything.


Yours


Calley x

Norfolk_Jim

Mojisola wrote: »

Have you talked any of the free debt advisors like www.stepchange.org

Yes, it was Stepchange who suggested selling the house to pay off debts as an option. I'm rather mortified by the cost of rents in comparison with what I pay now. I could no more afford them than I can afford things now - besides increasingly wife needs my care - I'm not sure I can continue at work much longer

Norfolk_Jim

Wife does get PIP at the full rate. Yes our area is a UC area.


I'm trying to learn as much as I can. It seems so hard to work out what to do. The helpful folk on the debt-free board always seem to suggest defaulting on my debts + extreme austerity. I don't mind extreme austerity - we live that now - but to fail to pay back what I've borrowed and spent is something I would really want to avoid in so far as it depended on me. If I lost my job that might be different.