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Debt Relief Orders (DRO) - Information & help thread
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# 1
fermi
Old 01-01-2009, 9:22 AM
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Default Debt Relief Orders (DRO) - Information & help thread

Info from IS website:

http://www.insolvency.gov.uk/bankrup...bankruptcy.htm

Quote:
What is a debt relief order (DRO)?

DROs provide debt relief, subject to some restrictions. They are suitable for people who do not own their own home, have little surplus income and assets and less than 15,000 of debt. An order lasts for 12 months. In that time creditors named on the order cannot take any action to recover their money without permission from the court. At the end of the period, if your circumstances have not changed you will be freed from the debts that were included in your order. DROs do not involve the courts. They are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries, who will help you apply to The Insolvency Service for a DRO.

Is a DRO likely to be suitable for me?

To apply for a DRO, you must meet certain conditions:
  • You must be unable to pay your debts.
  • You must owe less than 15,000.
  • You can own a car to the value of 1000 but the total value of other assets must not exceed 300.
  • After taking away tax, national insurance contributions and normal household expenses, your disposable income must be no more than 50 a month.
  • You must be domiciled (living) in England or Wales, or at some time in the last 3 years have been living or carrying on business in England or Wales.
  • You must not have been subject to another DRO within the last 6 years.
  • You must not be involved in another formal insolvency procedure at the time you apply.
Further information
If you still have any queries regarding DROs you can call The Insolvency Service Enquiry Line on 0845 602 9848


Quote:
Originally Posted by CCCS_Matthew View Post
Hi all,

This is probably a good opportunity to mention that CCCS are one of the recognised approved intermediaries. If a Debt Relief Order is a suitable solution we will be able to help guide you through the full process of getting it set up.

If you do feel you fit the criteria for a Debt Relief Order, feel free to call us on the helpline on 0800 138 1111 (lines are open Mon-Fri from 8am to 8pm), or alternatively you can use our Debt Remedy facility by following this link here from the 6th of April.

If you would like to ask any questions about Debt Relief Orders, feel free to post on the CCCS thread here.

Regards,
Matthew.
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Last edited by fermi; 18-05-2011 at 12:55 PM.
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# 2
fermi
Old 01-01-2009, 9:22 AM
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Default Debt Relief Orders - Information & help

Further sources of information.

From Citizens advice.

This information applies to England and Wales

From IMA.

Qualifying Conditions Checklist

I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards, Loans, and Benefits boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com | > New to Forum? Click for Guide <

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Last edited by fermi; 18-05-2011 at 1:07 PM.
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# 3
debt doctor
Old 01-01-2009, 2:58 PM
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Default Debt Relief Orders

Hi all, and a very happy new year to everyone.

Just a reminder to look out for those who may benefit from the new debt relief orders ( DRO) coming in to force in April this year. There is info on the net but these are the main practical features;

Total debt must be no more than 15k

Must not be a homeowner ( not even with neg equity)

Assets must be below 300 although a vehicle upto 1000 is always exempt.

Disposable income ( after all reasonable expenses) of 50 or less. ( No provision of IPA's )

ONLY the debts listed will be wriiten off. If a debt comes to light that pushes over the 15k limit then the order will be revoked.

The conditions regarding restrictions on employment, borrowing, trading whilst undischarged are all the same as BR.

Debts that can go in to BR can go in to a DRO.

If applicants financial situation improves within the year then then the order may be revoked or applicant may be asked to contributr towards debts.

No early discharge.

MAIN ADVANTAGES;

There is no involvment of the court.

The cost is 90, and is able to be paid in instalments through payzone and post office outlets.

There is no local newspaper advert or placed in the London Gazette. DRO info is available on insolvency service web site.

You must apply through an intermediary ( CAB, CCCS, NAT DEBTLINE ETC) so advice must have been taken. Intermediary will asist with application, which is on line only. No fee can be charged by any intermediary.

My thoughts;

Are that most will be excluded via the 15k ceiling. Definately not suitable for someone in possession proceedings who may expect mort shortfall. Those applying must be certain about what they owe and who to. (biggest practical problem I think)

Useful for non home owners, with comparatively low debts who struggle to find the 360 + for BR.

What do you think ?


MAKE SURE that you apply for your credit report from Experian before you apply for a DRO. If your report says you are over 15k or your personal details are incorrect then your DRO may fail.

Best

DD
Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***

Last edited by debt doctor; 27-04-2011 at 9:59 PM. Reason: new information
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# 4
k2nga
Old 01-01-2009, 3:16 PM
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Sorry to ask as i did not know anything about this. It says no early discharge so how long does this DRO last for is it a year the same as BR.

Also are the conditions the same as BR ie. On your credit file for 6 years like BR?
K2nga

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# 5
DON79
Old 01-01-2009, 3:18 PM
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think it will be of benefit to some but like you said, it will exclude quite a lot of people because by the time you get to the stage of realising BR is your only option, most peoples debts will be larger than this and you also probably cannot remember to include every single debt.

I was wondering if there would be any new system brought in considering the amount of people who have been going BR.

Thanks DD, useful info.
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# 6
debt doctor
Old 01-01-2009, 3:18 PM
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Hi K2,

Yes discharge after 1 year, credit file 6 years as you say.
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# 7
peachyprice
Old 01-01-2009, 3:26 PM
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There's certianly a whole in the 'market' for this DRO. I'm guessing it will be people who have always been on a low income and haven't had the opportunity to mount up higher levels of debts that will benefit, the very same people who are not able to find the £495 fees needed for BR, especially those whose entire income is made up of benefits.

There have certainly been a fair few members here for who this would be a lifeline.
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# 8
startagain
Old 01-01-2009, 3:29 PM
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When I first heard about this I did think that it would be a good thing and will "help" a lot of people who are in desperate circumstances.
I do worry though, and I am aware about glasshouses and stones, that this may make it easier for people not to worry about being in debt because there is an "easy way out".
I guess it is up to the credit providers to be more vigilant in who they offer credit to and to have sensible credit limits ...... ( speaking from experience ) there is still too much raising of limits and credit being offered, especially by sub prime providers.
IMHO :rolleyes:
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# 9
k2nga
Old 01-01-2009, 3:34 PM
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thats the thing if the lenders were responsible then this would be a good thing but if they are not then i see your point.

Is there a set date for this to come into effect?
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# 10
debt doctor
Old 01-01-2009, 3:38 PM
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As Peachy says, this is aimed at those who survive on low incomes, its the cost of BR that forces many in this social group to be at the mercy of DCA for a great length of time, only being able to offer 1 per month, sometimes for years. ( I had one client about 3 months ago that has been paying Nat west a 1 per month since 1983 !!

DD
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# 11
fiveyearplan
Old 01-01-2009, 3:40 PM
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I think its a good idea - its like a 2 tier BR system. It certainly wouldn't have helped me but would have been useful for many others on here.

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# 12
k2nga
Old 01-01-2009, 3:50 PM
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Yeah true it would not have helped me and with so many having debts in excess of 15k it still makes it hard for those deep in debt to pay the 495 needed to go BR.

I was wondering the other day why they cannot allow you a crises loan to go BR is you met a certain criteria which would obvoiusly have to be paid back but might be easier for them in instalments
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# 13
startagain
Old 01-01-2009, 3:55 PM
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Who will be processing these if it is not the courts......?

I hope it wont be one of those beureacratic nightmares that we seem to be very good at in this country..... :rolleyes:

thinking of the CSA, Tax Credits etc - we seem to be very good at launching new things without the systems or technology to deal with it properly.

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debt doctor
Old 01-01-2009, 4:01 PM
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Its processed directly between the intermediary (CAB etc) and the insolvency service, submitted on line.

And.... the technology is not in place yet !

DD
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# 15
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Old 01-01-2009, 4:03 PM
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Quote:
Originally Posted by debt doctor View Post
Its processed directly between the intermediary (CAB etc) and the insolvency service, submitted on line.

DD

That sounds like a good idea........ it is going to make the debt charities and CAB very,very busy....

I hope they are going to get help from the government for extra funding.

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k2nga
Old 01-01-2009, 4:07 PM
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Yeah i agree i have been having to use the CAB alot in fact i am a regular now but they are up to there necks as it is and there are always a people waiting in the waiting rooms for advice.
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# 17
debt doctor
Old 01-01-2009, 4:07 PM
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Quote:
Originally Posted by startagain View Post
That sounds like a good idea........ it is going to make the debt charities and CAB very,very busy....

I hope they are going to get help from the government for extra funding.

SA
It is going to make us very busy as you say!! No extra funding is being given except that 10 out of the 90 fee goes to the money advice trust to provide training.

Wow !

DD
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Old 01-01-2009, 4:10 PM
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Yet another day that I am counting my blessings for having found this board and got the support for filing for BR sooner rather than later.....
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# 19
cr1
Old 06-01-2009, 11:03 AM
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Default Debt relief order (Debts under 15k) (merged)

Hi all,

I see there is lots of people going bankrupt with debts under 15,000 not sure if its been mentioned on here, basically in April goverment are looking to introduce a debt relief order that writes off debt upto 15k without a full blown bankruptcy, not sure if some of you can hold off until then!


"Debt Relief Orders should allow people with debts of less than 15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy."

http://news.bbc.co.uk/1/hi/business/7805892.stm
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# 20
fermi
Old 06-01-2009, 11:16 AM
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debt doctor posted a thread on this a few days ago with quite a lot of info/detail.

I'll find it and merge this thread with it. That should "bump" the other thread as well so everyone can see it.
I'm a Board Guide on the Debt-Free Wannabe, Bankruptcy, Credit Cards, Loans, and Benefits boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com. Board guides are not moderators. If you spot an inappropriate or illegal post then please report it to forumteam@moneysavingexpert.com | > New to Forum? Click for Guide <

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