Loan for debt consolidation /universal credit

suepat45

Hi need some advice I’m on pip esa and universal credit, I have bead anxiety and debt was making my anxiety worse, I was offered a Dc loan from my bank of 5000
which would more than half my repayments, without much though I accepted then like my anxiety does it kicks in! So now I’m stressing do I have to notify UC? Will they sanction me.

Spoonie_Turtle

UC only needs to know if you have savings over £6,000. 

(Presumably you won't have the loan money for long anyway though, if you're using it to repay debt.)

Brie

think about it like a balance set of accounts.

if you have substantial savings of over £6k UC would be interested of course.

But what you have is some money in the bank and a large amount of debt.  In fact you have twice as much debt when the loan gets paid into your account as you have both your old debts and the loan you have taken out to pay them off.  Once the debts are paid off you have no "savings" (so UC won't be interested) and you still have the loan to pay off but at a lower rate than the debts you had.  So you're ok on that front.

What you need to do though, especially as you suffer from anxiety about your debt,  is to ensure you have addressed the issue of why you were in debt.  It might be a good idea to pop over to the debt free board to put together a statement of accounts so people can help you see where you budget might be in need of some help.  (do ignore me if you've already done all this.)

Spoonie_Turtle

Brie said:

think about it like a balance set of accounts.

…

But what you have is some money in the bank and a large amount of debt.  

UC doesn't quite work like that, it goes on how much money you actually have in bank and savings accounts.  Whether you owe it to someone is immaterial; the money is yours until you've actually paid it to whomever it's owed.

Brie

Spoonie_Turtle said:

Brie said:

think about it like a balance set of accounts.

…

But what you have is some money in the bank and a large amount of debt.  

UC doesn't quite work like that, it goes on how much money you actually have in bank and savings accounts.  Whether you owe it to someone is immaterial; the money is yours until you've actually paid it to whomever it's owed.

But would it matter if you paid it out the same day it arrived in your account?

poppy12345

Brie said:

Spoonie_Turtle said:

Brie said:

think about it like a balance set of accounts.

…

But what you have is some money in the bank and a large amount of debt.  

UC doesn't quite work like that, it goes on how much money you actually have in bank and savings accounts.  Whether you owe it to someone is immaterial; the money is yours until you've actually paid it to whomever it's owed.

But would it matter if you paid it out the same day it arrived in your account?

Paying off debt when claiming UC is allowed. Although in this case it wouldn't matter anyway if their total savings are less than £6,000.

suepat45

Thank you all so much I didn’t sleep a wink last night over this, I kept trying to find information on it but it was so confusing! I might sleep a little better tonight! X