Being wrongly charged with a crime is a personal nightmare that can quickly become a financial disaster.

The vast majority of people are expected to defend themselves from their own income and assets, even if it means remortgaging the house.

The same is true for fighting a civil lawsuit.

Most people who have attained any modicum of financial success will find there's no help for them as their income and asset levels are above those below which legal aid will be granted.

Even if their income and assets, and those of their partner, are low enough legal aid will be a loan they will be expected to repay all or part of.

The latest case to be heard by the Legal Aid Tribunal, where people can dispute legal aid debts, illustrates nightmare of being wrongly charged with a crime.

The woman, referred to only as MD, was accused of 12-13 counts of theft by a person in a special relationship totalling over $300,000, charges, she said, were "vexatious, arbitrary, and vindictive". Around three years after being laid, the charges were dropped.

The woman, who cares for her adult disabled son full-time, did not have a high income and applied for legal aid to defend herself. She was a beneficiary. Her husband was earning over $40,000 from his business.

Legal aid is system of loans funded by the Crown to pay for lawyers for low-income, asset-poor families defending themselves against serious criminal charges, involved in civil court cases, or in family law disputes.

People qualify for the loans depending on family income, size, and the total capital they command, including assets tucked away in family trusts. The amount they have to repay depends on their income and wealth, with debts becoming payable six months after the case, and unpaid debt attracting interest at 8 per cent a year.

MD was not asset poor. The family home, in which there was substantial equity of around $365,000, was held in a family trust, to ensure her severely disabled son was taken care of in the future.

In order to get legal aid, she and the other trustees had to agree to the Crown taking a statutory charge over the property, meaning, if it were ever sold, the legal aid debt would have to be repaid from the proceeds.

The legal aid debt MD incurred was over $42,000, well below the maximum her income and assets would require her to repay- some $193,305, with just over $118,500 expected to be repaid from her assets, either by the sale of the house, or the raising of a mortgage over it.

The woman fought to get the debt reduced using the system of appeal to the tribunal.

Initially, she was told nearly $14,000 had been written off, but, on pushing, a further $12,500 was wiped. She requested the Legal Services Commissioner look again, arguing the charges should never have been laid, the extreme strain she suffered and the complex needs of her son. The result was the debt was dropped to $7000. The tribunal would not however reduce it to zero.

It was a fight, but the system worked, even if the result was not all MD would have wished.

Legal aid is an important part of New Zealand's justice system, but increasingly it is not available for a growing number of Kiwis deemed to be earning too much to merit it.

There are grumblings in the legal profession that it is time to revisit legal aid, which was pared back in 2010 in a bid to stem the rapid rise in costs to the Government.

In 2010, legal aid funding was $132.4million. In 2015, it was $105.2m.

The rule changes saw the availability of legal aid for civil cases drop sharply, which Community Law Centre chief executive Elizabeth Tennet said had resulted in a spike in poorer people seeking free legal advice from the law centres, despite their funding having been frozen for years.

Each year the before tax income levels at which people qualify for civil legal aid remain unchanged, even as inflation marches on. That means each year fewer and fewer people qualify, making legal aid an issue of little political relevance to middle New Zealand, and therefore not a high political priority.

Barrister Elizabeth Bulger, convenor of the Law Society's legal aid committee, said: "There's no PR to be had from criminal legal aid."

It would take a massive miscarriage of justice that hits the media to spark public interest in legal aid again. "It will take something really, really terrible before people will understand how far reaching the changes have been."

There has been growing concern about self-represented litigants in all courts.

Law Society spokesman Geoff Adlam said: "All around the world there are quite noticeable rumblings about legal aid."

In the UK there were protests and boycotts by barristers, and concerned voices in Australia, including mainstream bodies like the Productivity Commission, have been on the rise.

"There hasn't yet been a similar move in New Zealand, but it is starting to come out in debates about access to justice," Adlam said.

Recent editions of LawTalk, the magazine of the Law Society, have highlighted increasing concern about middle and low income New Zealanders being priced out of the courts, or increasingly choosing to represent themselves.

Would you qualify for legal aid?

Even if you don't feel rich, the legal aid system may well deem you able to fund your own defence, or fight your own corner in a case. The "eligibility" manual on the Ministry of Justice website sets out the criteria, though the system is flexible and allows for special circumstances to be argued.

When it comes to fighting a civil case, only the most cash-strapped are likely to qualify. Just 5.3 per cent of legal aid was paid to fund civil cases in 2015.

There is a schedule of maximum levels (put in place in mid-2011 and remaining unchanged since) of pre-tax income for the purposes of determining whether someone qualifies.

Single people have to have incomes of less than $22,366 a year. If they have a partner, or dependent child, it rises to $35,420, and again to $50,934 for an applicant with a spouse and one or two dependent children. Add another child, and its $64,678, and yet another and it rises to $72,302.

To qualify, you also have to have very little in realisable assets, just $3500 with another $1500 allowed for each partner and dependent child. Equity in the home is treated differently with a "home equity allowance" of just $80,000. Unless there are special circumstances that can be argued, folk must try access that equity, before expecting the taxpayer to fund their case. Assets gifted to trusts will be included in the calculations. If no bank will give them a loan, they may be able to get legal aid, but be expected to pay more of it back than someone with no home equity, like a renter.

How much of the legal aid must be repaid, and how much is forgiven, depends on income and the assets a family has. For those with equity in a home, a statutory charge may be a condition of granting legal aid, meaning the debt will be repaid when the home is eventually sold, with interest compounding at 8 per cent until it is.