Thank you both for your replies, I will follow up the suggestions and look further into all of them.

Yes we already get all the benefit we are entitled to, we receive the "amount the law says you need to live on" which has gone up from about £121 a week to £130 a week in 8 years LOL! Plus we get Housing Benefit which helps towards the rent and we meet the difference out of the other benefit. Our Housing Benefit did go up by a few pounds a week recently, and we also qualified for a scheme where our water rates could be fixed at a slightly lower rate, due to my husband's condition. Unfortunately though it's too little too late.

To compound matters there is also a chance my husband's benefits will be stopped due to the Welfare Reform Act where they are targeting sick people and trying to force them to work. My husband has a medical report from his doctor saying he cannot work - it could quite literally kill him. When we explained this to the DWP their attitude was more or less that if my husband does die then it's one less benefit claimant!

We won't give up though!

Hi

To be honest, I think the potential homelessness situation is a lot more serious than defaulting on some debts. Firstly, check that you are claiming all the benefits that you are entitled to (try www.entitledto.com). In the meantime priority bills (rent and council tax) and food / utilities are a lot more important than paying off your debts.

If you go to your local CAB, they can help to ensure you get all the benefits you are entitled to, as well as helping you to bring your debts under control. There are a variety ways of doing this, eg negotiating with creditors to freeze / reduce payments, debt relief orders etc.

Laura, the simple truth to your 'position' is that you are in a bankrupt situation or in other words, your debts exceed your assets and you currently have no realistic way of paying those debts back.

To declare yourself bankrupt would involve you going to your local court and completing the necessary documentation. This would also involve a fee (about £600 I believe). As you no doubt do not have this sum of money I would suggest that you write to your bank and credit card company. Tell them your exact circumstances and suggest that they may care to bankrupt you (this would save you the fee). They may very well write you off as a 'bad debt' though and NOT bankrupt you as it would involve them in losing even more money on you.

If you do go/are made bankrupt it only last for 12 months and IS NOT the end of the World for you. Thousands of people go bankrupt every year and survive it. If you are unsure of which course of action to take you could always make an appointment to see a debt counsellor at your local Citizens Advice Bureau (CAB office) for a free chat and consultation.

Whatever you decide, the very best of luck to you and your husband.

I was just wondering what happens to debts when a person is made homeless? How do creditors chase you if you have no fixed abode?

There is a chance that my husband and I may become homeless in the near future. We have the following debts: credit card £4,500, Overdraft: £1,900. We certainly do not wish to evade these debts, and have already contacted our bank to explain our circumstances and are awaiting a reply.

In the meantime, I really just wondered what the legal standing is on this situation?

(we have long since lost or had to give up any assets that we had - we have no property (we rent), no savings, no car, no TV (sold years ago to save on licence fees). Other than basic furniture and kitchen appliances there is nothing! We have no income either due to my husband's serious medical condition, so he just gets state benefits which just about cover utility bills and pay a proportion of the rent - hence the credit card debt to pay for essentials such as food etc)

We've never lived beyond our means, it is simply that the cost of living has risen by such a huge amount whereas state benefits only rise by about a few pounds a year, so eventually something's got to give.