Please Help

chirpychick

I have tried to contact CA and Step Change but everybody is overwhelmed and not taking calls or busy. 
My husband is about to be made redundant due to Covid19.
We have never claimed benefits properly before but our son is disabled and im his carer. 
We have debt - about 20k which is mortifying. It's 99% in my husbands name - unsecured loans and credit cards. 
He was going to withdraw money from his pension in Oct to clear this debt (which I know a lot of people advise against).
When he looses his job we would just about be able to afford to survive and pay the mortgage but not pay even minimum payments. 
We wont have enough spare to enter an IVA and we don't want to go bankrupt and lose our house (this is our biggest worry!!!!!!) so can he go into a debt management plan even if he can only repay small amounts despite owning a house? If we withdrew from the pension im assuming we wouldn't be able to pay off debt as we'd be expected to use that to live off and not claim benefits? Can we be forced into losing the house?
I desperately want to have a plan in place as I know this is coming within a matter of a day or 2 and need to ensure we don't end up homeless! I've never been in THIS situation before and am absolutely petrified.

thumpthump

Grab a cup of tea and take a deep breath!
This can be sorted!
Are you sure your hubby is going to be made redundant? If so... Will he get redundancy payment? 

chirpychick

thumpthump said:

Grab a cup of tea and take a deep breath!
This can be sorted!
Are you sure your hubby is going to be made redundant? If so... Will he get redundancy payment? 

Yes we are sure, he's in aerospace manufacturing. 
He will only get 3 weeks salary as he has only been there 2.5 years - he was made redundant 2.5 years ago from a job where he worked for 30 years. 

thumpthump

Benefit entitlements
ESA/income support
Pips (for your son) I don't know what age he is, possible tax credits.
Carers allowance

chirpychick

I went on to entitled to so I know what we will get but it's the debt situation im really stressed about. We had a plan and would have been out of it by the end of the year if this didn't happen. It's so scary

Galloglass

Don't worry about debt. There is always a solution. 

As you have assets (the property) the first issue is to think about protecting that. A Debt Management plan is a way forward but it will take a degree of financial discipline to do that. Try putting up a Statement of Affairs so others can suggest where you can squeeze a bit of money out for a DMP.

https://www.lemonfool.co.uk/financecalculators/soa.php

Fire_Fox

(((hugs))) 

The MSE 'Debt Free Wannabe' board are ACE at this sort of thing. Your first step is to complete a Statement of Affairs (detailed budget; linked to in the stickies). The DFW board have template letters you can send to creditors, informing them of your change in circumstances. You then make token payments of £1 each month whilst the DMP (or whatever) is sorted.

IIRC the creditor may well say they do not accept, you must make the token payments anyway. This is your evidence that you are willing, but simply unable, to pay. If any creditor/ debt collector telephones and tries to harass, bully or scare you, DO NOT answer the security questions, they then cannot discuss any money owed (data protection).

Speak to your mortgage lender too, they can arrange a payment holiday. If your home is adapted for your son's disability that is important information to share with the lovely people on DFW board. Remember they have all been where you are now, there is nothing to be mortified about or petrified about.

Yes you would be expected to live on any significant lump sum, and not simply pay off debts. So PLEASE Mr Chirpychick leave your pension alone!!

(((hugs))) again.

calcotti

chirpychick said:.. If we withdrew from the pension im assuming we wouldn't be able to pay off debt as we'd be expected to use that to live off and not claim benefits? ...

Fire_Fox said: Yes you would be expected to live on any significant lump sum, and not simply pay off debts. ...

This is not correct. For Universal Credit, which is the means tested benefit you would need to claim, you can use capital to pay off debt. It is not treated as deprivation of capital. This is expressly stated in the regulations.

However I agree with others that you should fully explore all other options before considering accessing pension funds.

poppy12345

thumpthump said:

Benefit entitlements
ESA/income support
Pips (for your son) I don't know what age he is, possible tax credits.
Carers allowance

This isn't correct. New claims for Income Support are no longer possible. New style ESA is only for those who have a limited capability for work because of a health condition.

As a couple they can claim Universal Credit, providing they don't have savings/capital of more than £16,000. If they claim UC then paying of debt is not classed as deprivation of capital.

OP you should use a benefits calculator to check entitlement to UC. https://www.entitledto.co.uk/ You also say you are your son's carer, does he claim DLA mid/high rate care or PIP daily living? Do you claim carers allowance for looking after him?