Threat of bancruptcy and benefits

welsh_worrier

Can some-one help my son is on DLA and IB and is likely to be for life.During a crisis (mental health) he took out a loan,this is maybe 8 yrs ago.He has been hounded for payment ever since but due to his problems he has done nothing about it.He often thinks its nothing to do with him.Now the company concerned are threatening bancruptcy against him.He did in the past make contact and promise to pay a small amount each month.The thing is he is now worried that his benefits will be taken off him if indeed they go ahead.
He also gets paid a miserly amount of pension from the armed forces.Can anyone advise me what to do ?

Scarlett.1974

Hi

It's highly unlikely any company will make your son BR (it costs them a LOT of money to do this and there's no guarantee they will get that back), they often use the threat of BR to try to frighten people into paying (with the exception of HMRC and American Express).

If he did go BR then no, they wouldn't be able to take his benefits from him at all.

It might be worth posting his situation on the debt free wanabee board. Maybe you could come to some arrangement with the company in question and sort out a DD for a manageable amount each month for your son to pay.

HTH

krisskross

Bankruptcy would not affect his benefit payments. It is very unlikely that anyone would make him bankrupt unless he has sellable assets like a house.

Perhaps he could contact one of the debt counselling agencies like the CCCS. They are a charity and their advice is completely free. Details of how to contact them are on the debt free wannabee board. With their help he could work out a payment plan to get them off his back. Having said that if he has had no contact for 6 years the debt could be statute barred and thus uncollectable.

Conor_3

My FIL signed up for loads of credit when he was in a similar situation but his was from a stroke. Ended up £150,000 in debt in literally a few months despite only having IB, DLA and War Pension as income. End result is that he ended up bankrupt as they refused to accept evidence he wasn't capable of making decisions at the time even though it was blatantly obvious he wasn't all there. He's kept all his benefits and got an early discharge.