Debt Relief Orders (DRO) - Information & help thread

creditisevil · 30 January 2009 at 3:01PM

DebtDoctor, I am eagerly waiting for more information on the debt relief orders, and I'm very grateful for you sharing information that you have as it comes available.

I have unsecured debts of 18,000, built up over the last 10 years, and due to life events I now have a low income and can't make the minimum repayments. I have no assets. Embarrassingly, I've been asking a third party to feed the monkey for the last month or two, holding out for information about this scheme. They've hinted they may stump up a payment to me to bring me below the 15k barrier for debt relief order, to avoid me going bankrupt. These are my only two options.

Anyway, my question is:
I'd be interested to hear anyone's thoughts on whether a payment from a third party to bring me under the 15k barrier would be viewed as okay? After all, the creditors get a small payment they wouldn't have had otherwise. On the other hand, the creditors could get greedy and think if a third party can contribute 3k then maybe they can somehow squeeze more money from the third party (which would be distressing and in the end wouldn't actually succeed).

I'm sure there are many others who's debts are a bit over the 15k barrier and working out how they can still access this scheme. Anyone's thoughts would be appreciated. DebtDoctor, could you possibly ask about this at the training course?

Thanks in advance for the great advice and spirit of helpfulness.

dvs · 30 January 2009 at 5:11PM

creditisevil wrote: »

I'd be interested to hear anyone's thoughts on whether a payment from a third party to bring me under the 15k barrier would be viewed as okay?

I think providing the £3,000 is distributed fairly among your creditors and assuming that the third party who is providing the funds is giving it to you, then I don't see a problem. I use the word giving because they can't be a creditor or your debts would still be above £15,000.

creditisevil · 31 January 2009 at 1:07AM

Thanks for your opinion on this, quite right, any payment to bring me under the 15k limit would need to be a gift.

Of course the problem is the full details of the scheme haven't been released yet. I would need to be certain that receiving a gift from a third party would result in a debt relief order and not just bankruptcy due to the debt relief order being not allowed. I hope this doesn't sound like worming my way out of paying - I would only receive a gift if it was so that I don't have to go bankrupt.

I hope I haven't hijacked this thread - it supposed to be about debt relief orders in general not this particular aspect of it.

dvs · 31 January 2009 at 12:51PM

It's fine to discuss topic here (well fine with me anyway!)

I really don't see a problem. The OR wouldn't have a problem if you owed £100,000 and somehow (perhaps through an inheritance or bonus) received £10,000 which you used to reduce your debts before going bankrupt. As long as it's distributed fairly (i.e. the people you owe the most to get more than the people you owe less to).

As far as I can see, the advantages to DROs is that they should be an easier process (although it is a new process so will have it's teething problems no doubt), it'll be cheaper and may not have the same stigma as bankruptcy. However, they are very similar to bankruptcy in terms of restrictions etc. I think it'll only be a matter of time before financial companies will ask the question Have you ever been made bankrupt, entered into an IVA or DRO? So mortgages or other financial products may be difficult to obtain.If you have around £15,000 worth of debt, then it makes sense to go for a DRO but I wouldn't go borrowing large amounts money off a relative or friend because that same amount could be written off in a bankruptcy. Obviously, if there are specific reasons for you not wanting to go bankrupt (perhaps your job or not wanting people to know about your bankruptcy), then it might be better to go towards a DRO. Also I guess it depends on what assets you have etc.

creditisevil · 31 January 2009 at 5:38PM

I agree, I think DROs will be viewed in much the same light as bankruptcy by financial companies. However, I think that the average joe public probably won't get to hear of debt relief orders, and so if they found out, wouldn't view it with the same stigma as bankruptcy.

One thing i'm concerned about is if I apply for a job in the future, and the employer googles my name, and up comes 'bankruptcy', then they run a mile, mistakingly thinking I must have ripped people off or been dishonest with money or just plain reckless (which we all know is not true for most bankruptcies). However, if they find I've had a debt relief order, they just assume I defaulted on a car loan or something a long time ago.

Or perhaps with the consumer credit bubble bursting, maybe future attitudes to DROs or bankruptcies may be different, given the amount of young people in trouble with debt and with no assets to offset this?

debt_doctor · 2 February 2009 at 11:33AM

Hi all,

The latest addition to the 'licenced intermediary' list for DRO's is................. Baines & Ernst - the well known DMP and IVA rip off company !:eek: :eek: :eek:

I can see their advert now....' Little known piece of legislation, DRO's, wipe out all your debts.......' then when they find the applicant does not fit the criteria ....." but we can offer you one of our dodgy DMP'S OR IVA's:mad: :mad:

This is what their web site says about BR...........

The basic criteria for bankruptcy is:

If you have a very low or negative disposable income
If you cannot afford to make repayments on your debts
No it is NOT !!!! - the basic criteria is that you are insolvent, meaning you cannot pay your debts as they fall due and / or your liabilities outway your assets.
If you have disposable income you will always be better off in BR than an IVA ( unless other reasons make BR unwise)

The last line infers that if you CAN afford to make repayments to your debts then an IVA or other would be better !

...and heres some more from their website on 'IVA's FAQ's'......

Do I have to be in full time employment?
No. To enter into an IVA, you only need to have a surplus of income above what you need to live on.

Does it make a difference if I am a homeowner or tenant?
No. It makes no difference whether you are a tenant or homeowner or even if you are still living with your parents.

Would an IVA be in the best interests of those above ???? Hardly ever !

DD

tigerfeet2006 · 2 February 2009 at 12:49PM

Bl00dy he11 DD, how the bleeding heck did they manage that? Surely the powers that be can see that it is not a good idea

That advise on their website is so aaaarrrgh!!!! :mad:

glam_jan_56 · 3 February 2009 at 11:39PM

hi there what happens with a d.r.o. if myself has 19.000 debt an hubby 12.000 will i be made bankrupt an hubby gets an d.r.o.

debt_doctor · 15 February 2009 at 12:30PM

Hi,

Latest information is that the £ 90 fee can be paid for in 6 monthly instalments via paypoint, so the only immediate upfront money required will be £ 15 !

DD

fiveyearplan · 15 February 2009 at 12:33PM

debt_doctor wrote: »

Hi,

Latest information is that the £ 90 fee can be paid for in 6 monthly instalments via paypoint, so the only immediate upfront money required will be £ 15 !

DD

I wonder if they'll send bailiffs in if people default on their payments.:rotfl::rotfl:

Debt Relief Orders (DRO) - Information & help thread

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free