Dwp

FixitM · 16 August 2018 at 10:10AM

Hello. Just wanted to check if this is correct. DWP have sent a letter to my husband after years, chasing repayment of a crisis loan. They say it wouldn't have been written off unless detailed in the bankruptcy (although he's sure it was), is that correct please?

Also assuming overpayment of Tax Credits are also exempt from bankruptcy?

Thanks in advance.

National_Debtline · 16 August 2018 at 11:11AM

Hi FixitM,

Unfortunately, a crisis loan is excluded from bankruptcy, so would still need to be repaid if your husband went bankrupt after 19th March 2012. You mentioned that this is an old debt, so the only other issue could be if the crisis loan is statute barred, however, that would only prevent them suing for the money to be repaid, they can still take money directly from wages (without a court order) or through some ongoing benefit claims.

With regard to the tax credits, that would be written off through the bankruptcy, as long as the overpayment is not deemed to be fraudulent.

Laura
@natdebtline

debt_doctor · 20 August 2018 at 7:54PM

Hi,
I completely agree with Laura (National Debtline) above - just to add that if the bankruptcy was before 19th March 2012, then, like any bankruptcy debt, it (the crisis loan) would be written off whether listed on the forms or not.

DD

FixitM · 13 September 2018 at 12:50PM

Thank you for your replies. Sorry for the delay in responding (kids all got ill with a horrible bug which we then got).

He has set up a payment plan for the crisis low. In terms of the overpayment of tax credits we will check what year it relates to. If It's before the start of his bankruptcy, how would it work with it being a join claim under both our names?

Thanks.

National_Debtline · 13 September 2018 at 2:50PM

Hi FixitM

If the period of the tax credit overpayment is prior to the date of the bankruptcy order, your husband should no longer be liable for it. That's regardless of whether he remembered to list the debt on his bankruptcy application, and assuming it was not classed as fraudulent.

Unfortunately though you will remain liable for the debt as it was in joint names. Legally you owe the full amount of the overpayment, but tax credits are one of the only organisations who use their discretion to split a joint debt in half where a couple have separated and cannot agree a repayment plan. You will need to check with them whether in your situation they agree you only have to pay half of the overall debt.

Good luck with it all

Susie
@natdebtline

FixitM · 14 September 2018 at 12:20PM

Thank you very much for your help Susie. We will check it out.

Dwp

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free