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DWP Debt Management Letter – Should You Pay? 

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Scott Nelson

Managing Director

MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.

Learn more about Scott
&
Janine
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Janine Marsh

Financial Expert

Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.

Learn more about Janine
· Feb 6th, 2024
Could you legally write off some debt? Answer below to get started.

Total amount of debt?

This isn’t a full fact find, MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

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DWP Debt Management

For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.

Have you had a letter from DWP Debt Management? This could make you feel confused and worried. After all, nearly half of individuals who deal with debt collection agencies have experienced harassment or aggression1.

You’re not alone. Over 170,000 people each month come to our website for help with debt problems.

In this guide, we will tell you:

  •  How to check if the debt they say you owe is really yours.
  •  What you can do if you can’t pay the money they ask for.
  •  Ways to ask DWP Debt Management to show proof of the debt.
  •  How to deal with letters from DWP Debt Management.
  •  What might happen if you don’t deal with this debt.

We have a lot of knowledge about debt letters from DWP Debt Management. We want to help you understand your letter and what you can do about it.

Ready to find out more about dealing with your DWP Debt Management letter? Let’s get started!

Could you legally write off some debt?

There are several debt solutions in the UK, choosing the right one for you could write off some of your unaffordable debt, but the wrong one may be expensive and drawn out.

Answer below to get started.

How much debt do you have?

This isn’t a full fact find. MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

I have a letter from DWP saying I owe money, what do I do?

DWP Debt Management may have written to urge you to repay a benefit advance or to inform you that you’ve been overpaid in your benefits for a variety of reasons, including the following:

  • You got a short-term benefit advance or a ‘budgeting loan’ from the government because you needed money before your benefits payment day. The government didn’t charge you any interest on the loan.
  • You failed to record a change in circumstances that would have affected the number of benefits you were entitled to, such as moving in with a partner.
  • You provided incorrect information when filing your benefits claim or reporting a change in circumstances.
  • Your payment was made incorrectly by the DWP.
  • It’s also possible that you haven’t been overpaid and the DWP Debt Management letter was issued in error.

You Can Ask DWP Debt Management to Prove the Debt

Just because DWP Debt Management state you owe the money doesn’t mean they will be correct 100% of the time – although they most often are.

» TAKE ACTION NOW: Fill out the short debt form

There could be circumstances they do not know about, or they may have the wrong information on file for you (such as income, etc.).

For this reason, before you pay, request proof of the overpayment, which involves asking them to carry out a ‘mandatory reconsideration‘.

How a debt solution could help

Some debt solutions can:

  1. Stop nasty calls from creditors
  2. Freeze interest and charges
  3. Reduce your monthly payments

A few debt solutions can even result in writing off some of your debt.

Here’s an example:


Situation

Monthly income £2,504
Monthly expenses £2,345
Total debt £32,049

Monthly debt repayments

Before £587
After £158

£429 reduction in monthly payments

If you want to learn what debt solutions are available to you, click the button below to get started.

Get Started

Why You Shouldn’t Ignore a DWP Debt Management Letter

I always recommend responding to debt collectors – even just to question the debt’s validity. Remember, you have the right to request proof of the debt. They have to prove it or they can’t charge you.

The worst thing you could do in this situation would be to ignore the DWP Debt Management letter. By ignoring the letter, you could open yourself up to legal proceedings.

Even if you can’t afford to pay the amount stated in the DWP Debt Management letter, do not ignore it. There are ways around this problem before the DWP Debt Management’s debt recovery process gets underway.

What Happens If You Don’t Pay DWP Debt Management?

If you don’t pay DWP Debt Management, they could raise a court case against the overpayment to get a CCJ (county court judgement) that forces you to pay.

A CCJ on your credit file could make it harder to get a loan, credit card or mortgage for 6 years when it expires.

Enforcement agents (Bailiffs) could come to your home and demand payment or take your valuable items to be sold and pay off the overpayment debt.

But in most cases, this can be avoided (even when you can’t afford to pay it back!)

Thousands have already tackled their debt

Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.

Natasha

I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.

Get started

Reviews shown are for The Debt Advice Service.

What happens if I can’t afford the repayments?

Owing money is never a nice experience. However, the first thing you should do if you receive a letter from the DWP is to get in touch with them.

While they would like the money owed back straight away, they cannot force you to do this. Instead, they will talk with you about your income and earnings, plus your expenditures.

Then they should come up with a solution that involves affordable repayments to help you pay off any debts owed. Any financial hardship considerations would be taken into account.

The DWP would send you an Income and expenditure form to help evaluate your circumstances before agreeing on a repayment plan.

How Do Joint DWP Overpayments Work?

You may have received financial support from the DWP as a couple. If that is the case and you have now been issued with a DWP Debt Management letter to recover the overpaid benefits you received jointly.

It’s worth noting that you are both responsible for 100% of the debt.

Some people may have separated from the person they received the DWP payment with. You are both still 100% responsible for the benefit overpayments.

As such, you cannot leave it up to the other party to pay.

Complain About Your DWP Debt Management Letter

If you believe there has been a mistake and you were not overpaid, you should first provide DWP Debt Management with the correct information.

This could be done over the phone and you may need to send them documents.

If they disagree and you still believe their calculations are incorrect, you do have the option to complain about DWP Debt Management to the Independent Case Examiner.

But you must follow the DWP complaints procedure first.

They will weigh up the facts to decide what has happened. They are impartial and operate fairly when it comes to debt collectors reaching a conclusion.

I suggest you seek advice on DWP overpayment appeals from a debt adviser first.

DWP Contact Information

Phone: 0800 916 0647
Text Phone: 0800 916 0651
NGT text relay
(if you cannot hear or speak on the phone)
18001 then 0800 916 0647
Website: DWP Debt Management
Address: Debt Management (C)
Mail Handling Site A
Wolverhampton
WV98 2DF

FAQs

What is a DWP debt?
DWP stands for the Department for Work and Pensions. A debt with them results from overpaid benefits in which you must pay back.
Can DWP write off debt?
Yes. DWP can write off debt by deducting money from your universal credit.
How much can DWP take for an overpayment?
The maximum amount DWP can take out of your wages varies by how much you earn and whether you are guilty of an offence. 60% of your earnings is usually left.
How will DWP get in touch with me?
The Department of Work and Pensions will already have most of your contact details. However, they will first attempt to contact you about overpaid benefit or claims through the post.
Can DWP access your bank account?
Yes. Depending on your circumstances, the DWP can check your bank account and social media accounts if you are suspected of benefit fraud. For instance, they can obtain information from your bank if they suspect you did not disclose the full amount of capital in your bank account and are claiming income support.
Do DWP debts go on my credit file?
Your receipt of universal credit will not negatively affect your credit rating. However, it may have an impact on any credit applications you make, such as mortgages, loans, or a new credit card if your DWP debts aren’t paid back on time or you owe more money elsewhere.
Is benefit overpayment a priority debt?
Yes. This is a priority debt because if you don’t pay, HMRC can send out a debt collector, take the money from your wages, take the money from your benefits or tax credits, and even use bailiffs to take your property. HMRC will warn you if they’re going to do this but they don’t have to go to court first. If you have the money but choose not to pay back a tax credits overpayment, HMRC can take you to court. If you don’t go to court when asked or don’t do what the court tells you to, you could be sent to prison.
Could you legally write off some debt?

Answer below to get started.

How much debt do you have?

This isn’t a full fact find, MoneyNerd doesn’t give advice. We work with The Debt Advice Service who provide information about your options.

References

  1. Indebted Debt Collection Survey
The authors
Scott Nelson Profile Picture
Author
MoneyNerd’s founder, Scott Nelson, has a decade of financial industry experience, including 6 years in FCA regulated loan and credit card companies. Troubled by a lack of conscience in the industry, he founded MoneyNerd to give genuine advice to those in debt and struggling financially.
Janine Marsh Profile Picture
Debt Expert
Janine Marsh is an award-winning presenter and a valuable member of the MoneyNerd team. With a wealth of experience as a financial expert, she's been featured on BBC Radio 4, BBC Local Radio, and BBC Five Live, and is a regular on Co-op Radio.
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