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Debt Solutions

Debt and Benefits

Benefits are designed to make your life easier when you fall into difficult situations, such as unemployment, disability or being a carer. This can make dealing with debt very difficult and stressful, especially with government caps on benefits.

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

The most important thing is to check that you’re receiving all benefits to which you’re entitled. If you find that you could claim more than what you currently do, the extra money may be enough to help you get back on your feet.

Checking benefits and tax break entitlements

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 that you’re entitled to that you’re not currently receiving and help you to 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 job seekers allowance, which may provide some income which 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 this can be even harder if you’re on 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 cannot enter into a Trust Deed if you live solely on benefits.

Elsewhere in the UK, if you are unemployed and on benefits then solutions such as an IVA is still 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 for you to make just one monthly payment for five years. This would be done by looking at your monthly income and expenditure to find a figure you can afford to pay to settle your debt.

If debts are stressing you, get in touch with Creditfix today. We offer free, impartial advice to help you take back control of your finances.

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