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Thread: Can anybody help. Debt and benefits

  1. #1

    Can anybody help. Debt and benefits

    I have a relative who lost his job. His workplace failed to pay him his monthly wage, two months worth of overtime and a years holiday. The way the firm treated him made him ill and he has been forced to claim benefits. His firm went bankrupt and he has since found out they paid all of the workforce except him. He also suffered two bereavements around this time. Because this he now finds himself in about £8000 of debt.

    He went to see someone at his local CAB. They advised he fill in a mental health and debt form-which he did. Whilst doing this he looked up the organisation responsible for these forms and noticed in their guidelines that it is recommended that creditors do not class his sickness benefits as disposable income Page 28:

    My relative wrote back to the CAB telling them this and the person dealing with his debt disagrees. She has told him she wants from him an indication of how much income his wife brings in along inclusive of his benefits so she can perform a calculation with regards to assessing the total amount of outgoings and money left over. My relative, including his wife have stated they are not happy with this. The debt is nothing to do with his wife and she rightly, in my find, feels she shouldn't have to pay. She also doesn't like the idea of having to present her financial business to strangers and most, if not all of the spending to do with the debt occurred two years before they were married. My relative is not happy about this either as he feels his wife is being held partially responsible. The debt lady feels that is the only way my relative can show my relative is being fair and honest to his creditors. The request for my relative to have to include his wife's income into any negotiation is making his health worse as well as the CAB lady wishing to include his sickness benefits as disposable income. Does anybody know if this debt worker is being fair and that her suggested practice is both reasonable and legit?

    I think I read somewhere that deductions from benefits have set limits, but can't be sure. Thankyou.

  2. #2
    I have a friend who was in a lot of debt and they contacted Step Change. It's a free charity organisation I think.Google them.They were very very helpful and sorted out a payment plan for repayment.It took a big weight of their minds
    She tried CA first but found them to be of no use.

  3. #3
    Much obliged. I'll point him in their direction

  4. #4
    The main issue my relative has is his adviser is going against the recommendations of the Mental Health & Debt Guidelines by trying to class his sickness benefits as disposable income. Furthermore, she insists he has to show that every penny he receives from his disability benefits is being demonstrably used for disability costs? I'm not sure what the DWP guidelines or requirements are but I'm pretty damn sure his benefits are being used for the reasons or spirit in which they have been given. What the heck are disability costs? They are not written in stone and can mean anything from taking a taxi to a local hospital to day-tripping four days a week because of low mood due to mental health issues. As previously stated, the debts are his, not his wife's, so for the life of me I cannot understand why his wife's income has to figure into into his advisers equation? I'm sure there's no legal precedent for this and this adviser isn't acting in my relatives best interests.

    Tbh I think it would be better if he got rid of this adviser. My relative told me the CAB adviser was talking about being fair to everyone concerned and she wasn't too overly concerned when he mentioned he had just lost his Mother, his job and that his place of work hadn't given him his annual holiday entitlement, a months overtime and seven months wages he was entitled to. He told me his workplace took advantage of his vulnerability (cognition issues due to a brain condition) and operated illegally before going bankrupt.

    I will help him as best as I can-until he can get "professional" help, but working out and identifying his extra disability costs is likely to be cumbersome?
    Last edited by phillius; 09-22-2019 at 02:07 AM.

  5. #5
    I hope you get this sorted and again I would from what my friend told me she would 100% recommend Step Change.

  6. #6
    Thank you for the reply. He really is in a state. He spoke to the Cab woman alone. However, his cognitive functions are limited due to his condition and he can't remember what it is he has said. His adviser continues to treat him as though he is of "sound mind and body" so a call to Stepchange followed by a letter to the CAB requesting all the information given will be the order of the day tomorrow.

    Can anybody confirm that when his creditors and advisers consider both his wife's and his income, they are only trying to ascertain the contribution he is making to the household, or both incomes as a whole. I'm not sure if I understand the process.

    Incidentally the amount of debt outstanding is £8000. This would have been the total amount of wages his place of work owed him had they have paid him. It was a horrible place by all accounts.

    Would it be worth approaching a charity given the way he was illegally treated in addition to his illness. Sorry for the questions. I'm just trying to consider the options. I know he needs breathing space whilst this gets sorted out.
    Last edited by phillius; 09-23-2019 at 06:52 PM.

  7. #7
    My friend was on ESA , he was offered a NatWest overdraft of £2500 he drew it all out and put it under the sink in a carrier bag , they later asked him if he would like to apply for a loan he asked for £7500 and they put it in his account in 48hrs he withdrew it all and put in with the rest (under the sink) he has changed his email and number and won't answer the door he has mental health issues and hoards stuff , he will not spend the money but likes to count it ..
    These banks seem to lend loads of money at 18% pa because there getting it for 1% pa.

  8. #8
    I don't know about 1% per anum but it seems entirely inappropriate for banks to be throwing money at vulnerable people without safeguarding them and themselves.

    With regard to my relative, his partner is adamant she will not divulge her income despite the adviser claiming this will not be fair to everyone and disadvantageous to him. I'm not sure where this will go given there is no legal obligation to divulge and my relative has no assets and will not likely work again due to his condition. My concern is with the attitude of the adviser who appears biased towards the creditor at the expense of the client/consumer with regards to his budgeting assessment. Furthermore, I think it is absolutely scandalous to sit there and expect my relative to give an accurate and concise description of his outgoings with a brain injury disease. By the look of things she intended to trap him in to a situation where my relative will be left paying for the debt for the rest of his life when a simple Debt Relief Order would have the effect of writing off the debt for a nominal fee of £90.00 within twelve months. The adviser argued he had too much by way of benefits to qualify whilst not taking into consideration the complete costs he is likely to incur due to his condition. It also shows a complete lack of experience on her part.
    Last edited by phillius; 09-23-2019 at 07:20 PM.

  9. #9
    Quote Originally Posted by barbiejane View Post
    I hope you get this sorted and again I would from what my friend told me she would 100% recommend Step Change.
    Most creditors will not spend money chasing debts if they know the circumstances you discribe , from the start I would have told them this and ignored any further contact ( most just give up)..
    The CAB advisers have all been told to advise settlement to avoid further costs mounting a view I DONT share .

  10. #10
    I've written what I think to be some "constructive criticism" of the process my relative endured which appeared unsuited and unsympathetic to his condition. I have asked for for a replacement to the adviser he is using or a suitable alternative service. I also wrote two requests to Stepchange but have received no reply and will attempt to contact Disability Solutions once I receive a response from the CAB.

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