{"id":456,"date":"2022-11-16T13:53:02","date_gmt":"2022-11-16T13:53:02","guid":{"rendered":"https:\/\/trust-deed.co.uk\/?p=456"},"modified":"2026-02-12T12:02:21","modified_gmt":"2026-02-12T12:02:21","slug":"benefit-system-changes-and-debt-solution-access","status":"publish","type":"post","link":"https:\/\/mull.xthost.co.uk\/trustdeed\/benefit-system-changes-and-debt-solution-access\/","title":{"rendered":"Benefit System Changes And Debt Solution Access"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Benefits are linked to inflation, protecting recipients from the worst effects of rising prices.<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"> By design however, most benefits exist to cover only essential bills and expenditure. They\u2019re not intended to cover additional debt repayments, which can make life very difficult for those on very restricted incomes with credit commitments.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What options are open to residents of Scotland who live on benefit income and who are struggling to repay their debts?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Protected trust deeds (and debt arrangement schemes) are formal repayment proposals which creditors are asked to agree to. The professionals that set-up these debt deals are required to ensure that they\u2019re affordable for the debtor. Failing to do this will generally result in poor outcomes for all involved, as an unsustainable payment plan will not generally last long before failing.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Because of this focus on <a href=\"\/trust-deed-expenditure-guidelines\/\">sustainability<\/a>, if you rely on benefit income alone you are likely to find that you have no access to either of these debt solutions. As the benefits are there to cover your essential bills and expenses, it\u2019s not deemed viable to fund a contributory debt solution as well.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Some people receive a mixture of benefit income and private income. <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Private income might include your wages or a private pension for example. In these instances the maximum contribution you could make into a trust deed or DAS would be the amount of your private income. No element of your benefits would be allowed to fund your debt solution. This may affect whether you can pay a sufficient contribution towards your debts to make the chosen solution viable.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you\u2019re living on benefits income alone you do have access to sequestration (which is also known as bankruptcy). Under this option you would be expected to make no contribution towards your debts, unless your financial position was to improve over the following four years. You would still need to pay a \u00a3200 application fee however.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A cheaper route to sequestration is known as the Minimal Assets Process. If you own few assets and have a debt total of between \u00a31,500 and \u00a317,000, this option may be open to you. The application fee in this instance is reduced to a more affordable \u00a390.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Homeowners living on benefit income may be in a more tricky position. <\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">If your home has equity (your total mortgage balance is less than the value of the home) it might be at risk of being sold if you became bankrupt. This does not mean that you\u2019re trapped without any options whatsoever, but it will be important to consult with a professional debt adviser quickly to attempt to reduce any future risks to both you and to your property.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If you have any further questions about debt solutions and benefit income, please visit our <a href=\"\/forum\">forum<\/a>. A panel of experts are available to assist you.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Benefits are linked to inflation, protecting recipients from the worst effects of rising prices. By design however, most benefits exist to cover only essential bills and expenditure. They\u2019re not intended to cover additional debt repayments, which can make life very difficult for those on very restricted incomes with credit commitments. What options are open to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"class_list":["post-456","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/posts\/456","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/comments?post=456"}],"version-history":[{"count":1,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/posts\/456\/revisions"}],"predecessor-version":[{"id":1435,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/posts\/456\/revisions\/1435"}],"wp:attachment":[{"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/media?parent=456"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/categories?post=456"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mull.xthost.co.uk\/trustdeed\/wp-json\/wp\/v2\/tags?post=456"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}