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  • FIRST POST
    • Mra199
    • By Mra199 11th Feb 17, 12:58 PM
    • 21Posts
    • 6Thanks
    Mra199
    DRO questions
    • #1
    • 11th Feb 17, 12:58 PM
    DRO questions 11th Feb 17 at 12:58 PM
    Hello!

    I need help. I am currently in the process of sorting my debts out. I have a lot of creditors, 16/17 in total. Just under £13000 outstanding consisting of catalogues, payday loans unsecured loans and telecom. None of this was intentional and happened for unfortunate serious reasons. I am currently living with my partner and our baby under 1. My partner works full time but no contract and his shifts vary so does his pay. I am currently unemployed after mat leave and will be returning in August. At first we were advised a DMP which will take 10+ years to clear. That was as a joint budget. Going off my own share of the bills and my income (which is only benefit related) I have been advised a DRO. Looking at the criteria it seems I do qualify however there are a few things I'm unsure about and would really appreciate anyone's helps before I go through with the app. Creditor preferences? I am not sure what this means, there are outstanding balance I haven't even been able to make minimum payments to whatsoever and there is a doorstep lender I have which I haven't missed a payment for. Is this a preference? Also there is a very recent payday loan which I took because my partner was laid off at work and we had no income, he was to return to work the end of that month but then laid off again so hasn't been one payment made? Is this intentional debt and can I be refused for these reasons? I would really appreciate any advice!
Page 2
    • sourcrates
    • By sourcrates 4th Mar 17, 11:54 AM
    • 12,462 Posts
    • 11,858 Thanks
    sourcrates
    Hi,

    I've just checked the register this morning and I'm on there! So relieved.

    I understand now the creditors have 30 days to reject the order. I'm sure that I read on the DRO forum on here that they can reject if credit was used in the past 3 months, is this correct?
    Originally posted by Mra199
    Excellent news, very pleased for you.

    Hope you can put your mind at rest now.

    12 months will soon pass.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File And Ratings, and
    Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of MoneySavingExpert.com.

    For free debt advice, contact either : Stepchange, National Debtline, or, CAB.
    For Legal advice see : http://legalbeagles.info/
    • Mra199
    • By Mra199 4th Mar 17, 1:20 PM
    • 21 Posts
    • 6 Thanks
    Mra199
    Thank you!
    It just seems too good to be true as I thought I'd be in debt and have to deal with the struggle for the rest of my life. All through living alone at 16 years old with no family and stupid decisions! At least I've made my mistakes young and yes 12 months will fly by its nothing compared to over 10yrs on a Dmp.

    Thanks a lot for all your advice
    • Mra199
    • By Mra199 22nd Mar 17, 12:51 PM
    • 21 Posts
    • 6 Thanks
    Mra199
    Confused :(
    Hello, I'm back and I really need your advice! So my DRO was granted on the 3rd of March and today I have rang Manchester city council to set up a new direct debit for the council tax due for the new year 17/18. The lady I spoke to told me I can only set up this payment including all of the amounts which were included in the DRO. She explained that they had received the information from the insolvency and that they had done an assessment on my debt. She informed me that as it's not reached the recovery stage yet (which it had) it wasn't to be included in the dro and that I would have to pay it all. I then rang stepchange for advise and they said I needed to ring the insolvency service, which I did. The person I spoke to at the insolvency service frankly told me it was not for them to discuss this matter and that I should ring my debt advisor.... and that all he could say was that those debts were included in my DRO, I am not to pay them and as of today's date they haven't received any reply from the council.

    Now I don't know what to do. I just wanted to set up a direct debit for the new council tax so I don't fall behind on that and they won't allow me! And what happens if they do refuse for it to be included in the DRO does that mean the whole thing fails? Please help, I'm so worried and nobody can give me an answer
    • fatbelly
    • By fatbelly 22nd Mar 17, 7:05 PM
    • 11,528 Posts
    • 8,663 Thanks
    fatbelly
    Hello, I'm back and I really need your advice! So my DRO was granted on the 3rd of March and today I have rang Manchester city council to set up a new direct debit for the council tax due for the new year 17/18. The lady I spoke to told me I can only set up this payment including all of the amounts which were included in the DRO. She explained that they had received the information from the insolvency and that they had done an assessment on my debt. She informed me that as it's not reached the recovery stage yet (which it had) it wasn't to be included in the dro and that I would have to pay it all. I then rang stepchange for advise and they said I needed to ring the insolvency service, which I did. The person I spoke to at the insolvency service frankly told me it was not for them to discuss this matter and that I should ring my debt advisor.... and that all he could say was that those debts were included in my DRO, I am not to pay them and as of today's date they haven't received any reply from the council.

    Now I don't know what to do. I just wanted to set up a direct debit for the new council tax so I don't fall behind on that and they won't allow me! And what happens if they do refuse for it to be included in the DRO does that mean the whole thing fails? Please help, I'm so worried and nobody can give me an answer
    Originally posted by Mra199
    Your council sounds as stupid as mine.

    Here is the extract from the insolvency Service's guide to Intermediaries:
    Council Tax

    Each local authority levies and collects a council tax which is payable in respect of residential property in its area. The occupiers of the property have joint and several liability for council tax.

    At the beginning of the financial year, the local authority issues a ‘demand notice’ for the full balance due. This demand notice is an estimate of the tax due and is based on an assumption the tax payer will be resident in the property for the whole of the period, will remain a tax payer and that the property will remain in the same council tax band.

    The demand notice will set out the payments the tax payer will be required to make over the course of the year on account of the council tax payable. This is usually 10 monthly instalment payments.

    Any amount due and unpaid under the instalment agreement prior to the insolvency order is an unsecured debt in the proceedings. If the debtor’s council tax is up to date under the instalment agreement at the date of the debt relief order, no amount can be scheduled in the order as the unpaid balance relates to future occupation of the dwelling.

    If instalment payments are in arrears and the debtor has defaulted in respect of a reminder notice or a final notice this will have resulted in the whole of the remaining liability for the year becoming due and payable. If so, the whole of the amount is due and payable and is a qualifying debt whether or not the council has obtained a liability order. If the debtor has maintained their instalment agreement in accordance with the demand notice, or no reminder notice has been issued only sums accrued and unpaid up to the date of the DRO are a ‘qualifying debt’.

    Where a liability order has been obtained by the council, prior to the debt relief order being made the whole debt as notified within the liability order becomes due and it is therefore a qualifying debt.
    In practice the council will send at a fairly early stage of the arrears process, a letter saying 'you have lost the right to pay in instalments' At that point the text in bold applies and the whole year's council tax can be included.

    If you had a substantial amount of council tax still owing for 16/17 in March 2017, then it almost certainly would have reached that stage.

    You should make your payments to the 17/18 tax, by standing order or manually if necessary and let them know that they are forbidden from allocating any of this to debts frozen under the DRO moratorium.

    Incidentally, where my council acts stupid, I consider it my responsibility to remind them of the rules. I would have hoped the Stepchange Intermediary would do the same, though they probably work across several hundred local authorities and I only have the one.
    • Mra199
    • By Mra199 22nd Mar 17, 8:44 PM
    • 21 Posts
    • 6 Thanks
    Mra199
    Thanks so much, reading through that I do feel reassured. When I rang the council back, it was as though I was answering my questions for the advisor. In the end she told me that it would all be dealt with in the 'back office' and that she can't set up any payments for me but she would resend the letter to the insolvency stating the amounts aren't to be included in the DRO.

    There are 2 amounts included in the DRO one which was for year 15/16 and those arrears went to court so definitely included. 2nd amount was for year 16/17 arrears only a small amount but step change said as it was arrears and not up to date it was to be included in the DRO. I think this is what the council are questioning.

    I guess i will wait and see and in the meantime do as you advice with the payments for 17/18.

    Thanks again for your help I really appreciate it!
    • fatbelly
    • By fatbelly 22nd Mar 17, 9:34 PM
    • 11,528 Posts
    • 8,663 Thanks
    fatbelly
    . 2nd amount was for year 16/17 arrears only a small amount but step change said as it was arrears and not up to date it was to be included in the DRO. I think this is what the council are questioning.
    Originally posted by Mra199
    It is just possible that that is correct but if possible you should check the letters you got last year. If one of them says ''you have lost the right to pay in instalments' then it's a qualifying debt
    • Mra199
    • By Mra199 22nd Mar 17, 10:21 PM
    • 21 Posts
    • 6 Thanks
    Mra199
    Not one of the letters say that, even the one that is owed from 2015. each time it just states I also owe x amount from previous years...
    • fatbelly
    • By fatbelly 23rd Mar 17, 5:56 AM
    • 11,528 Posts
    • 8,663 Thanks
    fatbelly
    This is the usual arrears process. The asterisk indicates where it becomes a qualifying debt:

    If you miss an instalment, a reminder will be sent to you.

    If you bring your payments up to date but a further instalment is missed, a second reminder will be sent.

    If this is paid, but a third instalment is missed a final notice will be sent. You have now lost the right to pay by instalments and the whole year's bill is due*

    The Revenue & Benefits section may consider making a special arrangement for repayment of arrears, and you should contact them immediately if you are unable to repay.

    If you fail to make a payment after the issue of a reminder or final notice, or if you fail to maintain a payment arrangement, the council will request the Magistrates Court to issue a summons. At this stage court costs will be added to your account.

    At the court hearing we will ask the Magistrate to award the council a Liability Order in favour of the council.

    This Liability Order enables the council to potentially use one of the following options to collect the Council Tax:
    •Attachment of benefits or earnings
    •Charging orders
    •Enforcement agents
    •Bankruptcy and insolvency
    •Committal to prison
    • Mra199
    • By Mra199 23rd Mar 17, 7:31 AM
    • 21 Posts
    • 6 Thanks
    Mra199
    Thank you!
    The 1st amount has definitely been through that process however I have never received a reminder for the 2nd amount.
    • Mra199
    • By Mra199 5th Apr 17, 4:27 PM
    • 21 Posts
    • 6 Thanks
    Mra199
    Hi

    Just an update.
    Mcr city council have now informed me they have reassessed my case and will be including the amounts in the DRO and have sent a new response to the FOR unit.. I even received an apology.

    Again, thank you for your advice. Its helped!
    • ecthalion
    • By ecthalion 4th Nov 17, 4:54 PM
    • 10 Posts
    • 1 Thanks
    ecthalion
    Council tax and DRO
    Good afternoon. I'm hoping you can help me with my situation. I am due to apply for my DRO on 14th of November. I am behind with my council tax and by the 14th the full amount for the rest of the year will be due. Now I understand that this can be included in the DRO but as I wouldn't be paying council tax for the rest of the year this would free up £ 107 a month, would this mean my DRO would fail because I have more than £ 50 per month spare? I've put alot of time in this DRO and it was not an easy decision to make, I'm really worried that it will be refused on these grounds or that it will fail. I hope somebody can clear this up for me. Many thanks . S.
    • fatbelly
    • By fatbelly 4th Nov 17, 5:03 PM
    • 11,528 Posts
    • 8,663 Thanks
    fatbelly
    Good afternoon. I'm hoping you can help me with my situation. I am due to apply for my DRO on 14th of November. I am behind with my council tax and by the 14th the full amount for the rest of the year will be due. Now I understand that this can be included in the DRO but as I wouldn't be paying council tax for the rest of the year this would free up £ 107 a month, would this mean my DRO would fail because I have more than £ 50 per month spare? I've put alot of time in this DRO and it was not an easy decision to make, I'm really worried that it will be refused on these grounds or that it will fail. I hope somebody can clear this up for me. Many thanks . S.
    Originally posted by ecthalion
    Your DRO will run till November next year

    From April you will pay council tax at the normal rate

    Personally I'd put council tax in your expenditure at the normal rate - ask your intermediary how they want to play it.
    • ecthalion
    • By ecthalion 4th Nov 17, 5:14 PM
    • 10 Posts
    • 1 Thanks
    ecthalion
    Would it be advisable/possible to start making payments towards next year's council tax? Thanks for your reply. It's driving me bonkers.
    • ecthalion
    • By ecthalion 4th Nov 17, 5:15 PM
    • 10 Posts
    • 1 Thanks
    ecthalion
    Or maybe try to get up to date with my instalments if I can?
    • fatbelly
    • By fatbelly 4th Nov 17, 7:30 PM
    • 11,528 Posts
    • 8,663 Thanks
    fatbelly
    Would it be advisable/possible to start making payments towards next year's council tax? Thanks for your reply. It's driving me bonkers.
    Originally posted by ecthalion
    Or maybe try to get up to date with my instalments if I can?
    Originally posted by ecthalion
    Don't let it drive you bonkers - talk to your intermediary.

    You won't be able to make any payments to the 18/19 council tax till March next year - the rates will not have been set yet.

    I don't see the point of trying to get up to date with council tax for 17/18 if it's a debt you need relief from
    • ecthalion
    • By ecthalion 4th Nov 17, 10:02 PM
    • 10 Posts
    • 1 Thanks
    ecthalion
    Thanks mate. Your always there when people need you. It's much appreciated.
    • ecthalion
    • By ecthalion 17th Nov 17, 9:58 AM
    • 10 Posts
    • 1 Thanks
    ecthalion
    Thanks for your help. DRO was granted yesterday,I feel so relieved, this is a new chapter in my life.
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