Debt and related benefits advice

Videsta

Hi,

I have some questions regarding debt repayment and esa/pip back dated payments and if these are used to pay debts owed. Would I be on the correct board for advice please?

I was initially directed to the benefits related board and they have suggested I try a debt related board instead. I hope this makes sense. My apologies if I'm on the wrong board again.

kimwp

I think you'll get most help if you explain a bit more what the situation is - details of the debt, whether you are in a DMP, IVA or bankruptcy and probably an SOA (statement of affairs) would help as well. Have a look at some of the other threads on this board as an example.

Videsta

Thanks for your reply. I'll post briefly what the questions are and let me know what you think.

I've been told by a debt advice charity that creditors (specifically credit cards) can't use funds from PIP and ESA severe disability payments to repay debts owed. Is this correct or not please?



Also to follow on from that how are back dated payments of PIP and ESA severe diasbility payments used to repay creditors for credit card debt?

Will creditors basically take the back dated monies as they are a lump sum?


I'm in receipt of ESA support group contribution based and both of the above which began a couple of weeks ago.

I owe approx 25 000 spread across 4 credit cards.

I have cancer, no assets and am a tenant. Realistically due to health reasons I will have to move house in the next 6 months. I will need money to do this.

I don't want to commit to the debt charity until I've got some further information from you guys.

kimwp

Others more expert than I will have more specific advice, but I think you firstly need to understand that the credit card companies can't just take your money. What now will follow is a negotiation where you put together your budget and decide what you can afford to pay them before offering that to them. I would suggest that your PIP and ESA are set aside for your disability related expenses, but I am not sure how you do this practically in your budget.

First things first though:
1. Are you paying any interest on those credit cards? (Which is linked to:)
2. Which of the credit card accounts are defaulted?
3. What can you afford to pay towards your debts? (An SOA will help if you want advice on this)

kimwp

Just had a lightbulb moment - on your budget, have a line that says: disability related expenses and put the total of your PIP and ESA. 

Regarding the backpay of your benefits, again, take the advice of others more knowledgeable in the area, like fatbelly or sourcrates, but I'm pretty sure the credit card company don't get to see your accounts or how much money you have. It's just that usually paying off the debt with savings would be preferable to a damaged credit file. If you are going to need to move and you'll need a good credit history to do so, it's worth thinking about using the back paid money to preserve your credit (if it's not already affected by defaults). But I don't think you need to worry about it being taken from you.

flipflopflo

Is your tenancy housing association, local council or private rental?

When you move will this be a specially adapted house for your disability provided by a HA or LC?

Which debt charity have you contacted?

I would guess that looking at your circumstances that a DRO or even possibly bankruptcy will be recommended. 

This is the link to the SOA, if you’d like to fill it in, press the button to format for MSE and copy and paste here. 

https://www.stoozing.com/soa.php

Sorry to bombard you with questions and I very sorry for the situation you find yourself in. 

flipflopflo

Just a quick one I would suggest setting up a new squeaky clean bank account and get your money paid into it and pay your essential bills from it. Do not transfer any of the debt to it. 

Videsta

Hello all. Thank you so much for your replies. I'm really grateful! I'll post the rest of the information within the next couple of days if thats ok. I intended to this morning but am struggling today.My apologies.

kimwp

Videsta said:

Hello all. Thank you so much for your replies. I'm really grateful! I'll post the rest of the information within the next couple of days if thats ok. I intended to this morning but am struggling today.My apologies.

Yes, of course it's ok. This is your journey, we're here to advise and support when you need it.