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Debt and Benefits

Paying back debt when you rely on benefits isn't easy. Using this money to reimburse creditors can leave you with very little for yourself, and the payment process itself can cause a lot of confusion.

It’s important not to panic, though. There are options available, and with the right support you can explore a suitable course of action for your circumstances.

How can I pay debt if I’m on benefits?

Firstly, it is essential to ensure you are receiving all the benefit money you are entitled to. Be sure to do your research to make sure you aren’t missing out on any benefits you’re eligible for. For more information on benefit qualifications, contact Jobcentre Plus.

If you have recently started claiming Jobseeker’s Allowance because you have found yourself unemployed, it may be worth explaining your situation to your creditors. In some instances, they could be prepared to alter the repayment obligations – especially if you can show job prospects on the horizon.

Can I enter debt repayment agreements when I’m on benefits?

It can be difficult to successfully enter into a debt repayment agreement if you are not earning a regular income. In Scotland, for example, those on benefits do not ordinarily qualify for Trust Deed agreements.

However, if you claim benefits in England or Wales, you may qualify for an Individual Voluntary Arrangement (IVA) – where you agree a repayment plan with creditors over several years. Alternatively, you may qualify for a Debt Relief Order (DRO) or an informal debt management plan administered by an organisation, such as a debt management charity.

Can Bennett Jones help me if I’m on benefits and need to pay debts?

Our team are always on hand to offer information that can help you deal with debt – even if you’re on benefits.

To have a chat with our friendly advisors, get in touch today on Freephone 0800 7710 073 or through our contact form.

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