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bankruptcy and benefit advice needed please
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if someone is going bankrupt and they support their spouse due to disability the spouse cannot work and gets dla and employment support allowances can this be taken into account as an income?
its state benefit so im not sure of the rules etc so any help you can give would be great
thank sxx
its state benefit so im not sure of the rules etc so any help you can give would be great
thank sxx
Answers
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Am I right in assuming the person going bankrupt is working, & that the DLA & ESA is paid to their spouse? If so, the DLA & ESA are nothing to do with the bankruptcy - it is only the income of the bankrupt which should be used in assessing how much (if anything) the bankrupt has to pay to creditors. However, it is often difficult to separate out the expenditure of one household member from any others unless they keep their finances quite separate & each knows what they spend their money on.
So in practice there are different ways in which you can show the income & expenditure figures on the bankruptcy form:-
1. Show all the family income (including the DLA & ESA) & all the expenditure. The DLA & ESA would go down in the income section as a contribution from other household members. An item could go down on the expenditure side simply saying something like "Use of DLA for spouse's care/mobility needs" with the same amount as the DLA on the income side. All the ESA must be being used for part of the household expenditure so, if you adopt this option, make sure the total expenditure is higher than that in option 3 below by the ESA amount.
2. As 1 above but omit the DLA on both sides. Then only the ESA would be entered as a contribution from the spouse, & all the household expenditure would be shown other than that for which the DLA is used.
So in practice there are different ways in which you can show the income & expenditure figures on the bankruptcy form:-
1. Show all the family income (including the DLA & ESA) & all the expenditure. The DLA & ESA would go down in the income section as a contribution from other household members. An item could go down on the expenditure side simply saying something like "Use of DLA for spouse's care/mobility needs" with the same amount as the DLA on the income side. All the ESA must be being used for part of the household expenditure so, if you adopt this option, make sure the total expenditure is higher than that in option 3 below by the ESA amount.
2. As 1 above but omit the DLA on both sides. Then only the ESA would be entered as a contribution from the spouse, & all the household expenditure would be shown other than that for which the DLA is used.
Continued from above
3. Only put down the bankrupt's income. If this is done you need to identify what expenditure is made from that income & record that, but none of the expenditure made from the DLA or ESA. Whether you will find it practical to do this depends on how your family finances are managed.
Note that the Insolvency Service has rules to follow which mean they will not use any part of the DLA or ESA in deciding whether (or how much) the bankrupt has to pay to creditors. In case you do not know, so long as the surplus of income over expenditure is less than £100 per month nothing has to be paid to creditors at all.
3. Only put down the bankrupt's income. If this is done you need to identify what expenditure is made from that income & record that, but none of the expenditure made from the DLA or ESA. Whether you will find it practical to do this depends on how your family finances are managed.
Note that the Insolvency Service has rules to follow which mean they will not use any part of the DLA or ESA in deciding whether (or how much) the bankrupt has to pay to creditors. In case you do not know, so long as the surplus of income over expenditure is less than £100 per month nothing has to be paid to creditors at all.
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