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Debt and Benefits

Check if you qualify

Benefits are designed to make your life easier when you find yourself in a difficult situation, such as unemployment, disability or becoming a carer. Relying on benefits can make dealing with debt very difficult and stressful.

People in receipt of benefits are usually more likely to be on lower incomes, which can make paying back debts more of a challenge.

Our best advice is to check that you’re receiving all benefits you’re entitled to. If you find that you could claim more than you currently do, the extra money may be enough to help you get back on your feet.

 

Checking benefits and tax break entitlement

The best way to make sure you’re getting the most out of your benefits is to contact Jobcentre Plus. They can check if there are any benefits you’re entitled to that you’re not currently receiving and help you apply for them. You can also check this online using the government benefits calculator.

If you are out of work, you may be able to claim Jobseeker’s Allowance (JSA), which could provide some income that you could use to pay your debts. However, this is not often a large amount of money and is designed purely to help you get by until you find a new job.

Paying back debts while on benefits

Paying off debts can be hard at the best of times, but it can be even more challenging if you’re on a limited income. If you’ve recently become unemployed, speak to the companies you owe money to and ask what they can do to help you.

You’ll be surprised at how helpful some of them can be. After all, they’d rather get their money back directly from you than having to take legal action against you for it.

Getting help

Getting help with your debts in these situations can be difficult as you have fewer options. For example, in Scotland, you won’t be eligible for a trust deed if you live solely on benefits.

Elsewhere in the UK, if you are unemployed and on benefits, a solution such as an IVA could be a potential option for you. By entering into an IVA you could end up writing off a considerable amount of your debt and relieve yourself of the stress that comes with it.

You would come to an agreement with the companies you are in debt to and make just one monthly payment over five years. The monthly amount is calculated by looking at your income and expenditure to find a figure you can afford to pay to settle your debt.

If your debt has become overwhelming, get in touch with Creditfix today. We offer free, impartial advice to help you take back control of your finances.