What to do? DRO or IVA

hmczippy · 10 July 2017 at 4:19PM

Hi Everyone

I am due to speak to Step Change having completed an online assessment. I currently qualify for a DRO, having only £24 left after basic essentials. I am only temping at the moment however I am looking for permanent work on a salary that will hopefully increase my income to £200 more a month. Although my circumstances haven't changed YET, I am nervous about going for a DRO because they are likely to change. I rent privately and I am expecting my landlord to increase the rent in October by £100. If this happens then it will leave me with £124 left a month which means I won't qualify for a DRO.

So that leaves me with the option of an IVA? Should I go for the IVA straight away or risk the DRO option and hope that I only have less than £50 left over in 12 months time?

What would my IVA repayments likely be? I obviously can't afford much at the moment.

My debt is £15,000

Thank you

worried16 · 10 July 2017 at 10:28PM

As far as I am aware you need to have reasonably high surplus available for IVA. Remember, once you start work, your expenses will probably go up too

sourcrates · 10 July 2017 at 10:55PM

Keep temping for a year, do the DRO, get rid of your debt, then look for better work.

It's only 12 months, you don't want to be tied down to an IVA for 6 years, at present you would not qualify for the IVA anyway, as you could not afford the payments.

National_Debtline · 11 July 2017 at 3:21PM

Hi hmczippy

It’s very important to think about how your circumstances may change before entering into a DRO. If you think there is a good chance you won’t meet all of the DRO conditions for the 12 months it lasts it is unlikely to be your best option. Should the DRO fail you will not be allowed to apply for another one for 6 years.

It also doesn’t sound like you will qualify for an IVA right now as you don’t have enough spare money available. Another option could be to start by self negotiating reduced payments and a freeze on interest, wait until you find permanent work and then reassess your situation. Good luck with the job hunt.

Susie
@natdebtline

hmczippy · 11 July 2017 at 4:02PM

Wonderful advice, thank you. I really didn't want to enter into an IVA anyway. My credit rating is shot to pieces, so a DRO would be fine. I will have a think about reducing payments for now to see how my employment gets on or go for the DRO. To be honest I've had these debts for so many years and they've not shifted so a DRO does seem like my best option.

fatbelly · 11 July 2017 at 10:17PM

I agree with you. If there's no reason to fear insolvency, try a DRO.

The worst outcome would be that it gets revoked. You would have lost £90 but still have had protection from enforcement for X plus 3 months (you normally get notification of revocation).

I guess the only thing you need to take into account is that if you do need another DRO in 6 years you would not be able to get one.

Johnsmith2016 · 26 July 2017 at 6:46AM

Do DRO and temp for 12 months. Why drag something out for 5yr.

debtdepressed · 27 July 2017 at 2:24PM

Hi All

Just looking at options if dro fails. Whats the min payment accepted for IVA on debts of around £14k. Can an IVA be done with monthly payments of £50. I am getting so desperate i dont care if i can get my debts wrote off or have to pay, i just need a solution asap before i have a mental breakdown. Im pregnant and not eating or sleeping, i cannot carry on like this for another few months.

National_Debtline · 28 July 2017 at 12:24PM

Hi debtdepressed

I'm really sorry to hear how stressful you're finding things. Please try and make sure you look after yourself, that's always the most important thing to do regardless of debts.

Can I ask why you think your DRO might fail? It sounds like it's your best option based on your level of debt and surplus. Have you had a change in circumstances? £50 would not be enough for you to qualify for an IVA I'm afraid.

You can always contact one of the free debt advice agencies to discuss your options but you may also find you get a few more responses if you start a new thread.

Susie
@nationaldebtline

debtdepressed · 28 July 2017 at 12:50PM

Thanks for your reply.

Ignore me i was having a moment. Im going ahead with a dro and if that fails i will deal with that then!
Conflicting information regarding beneficial interst thats all, i wouldnt even beable to scrape together 50 a month anyway and i dont want to commit to something i cannot afford. Something i have learned. Yes i have spoken to NDL already but it wasnt a intermediary about beneficial interst. They give good advice but cannot answer my question as it needs to be a intermediary which i believe is 9 weeks wait from when my application is submitted.

National_Debtline · 31 July 2017 at 11:20AM

Hi there again

We all get those moments, I hope you’re feeling a bit better. There is a queue for DRO applications at National Debtline so you can always try a different intermediary.

Beneficial interest can be complicated area but an intermediary should not put you forward for a DRO without fully explaining any risks there may be to your application being refused. They will need to guide you on the ins and outs of beneficial interest and DROs and you can then make a decision from there. I certainly hope it all goes well for you.

Susie
@natdebltine

What to do? DRO or IVA

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