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    • Splodge1000
    • By Splodge1000 28th Sep 17, 7:17 PM
    • 30Posts
    • 7Thanks
    Splodge1000
    Debt Relief Order advice please
    • #1
    • 28th Sep 17, 7:17 PM
    Debt Relief Order advice please 28th Sep 17 at 7:17 PM
    I have been working with one of the debt advisory charities/services who have done everything they can to help me but I now have a dilemma. I have debts on cards under the £20,000 threshold but at present have no income whatsoever. No job, no benefits. Zilch. My partner is providing for me. A DRO would seem to be the best solution for me but here is my problem.

    I live in my partner's property with her and have done for a number of years. She has lived here for over 25 years and there is no mortgage. There is huge equity in the property (5 times the purchase price). The property is in her name alone, always has been and always will be. I have never been on the land register as a joint owner and never will be (I have never owned property). I never contributed a penny to the mortgage payments when there was a mortgage which is why the property has always been in her name only. This was the understanding. She paid the mortgage (out of her bank account) and was the sole owner and if ever we separated then I would have no claim on the property and would not want to have a claim. The question was asked by the debt charity as to "is there equity in your home" and I answered truthfully that there was huge equity but that it wasn't my home and not my equity,

    I have paid my share of the monthly bills when I have been able to (excluding mortgage and house insurance) and a few years ago a new galley kitchen was put in which cost £900. As my financial position was better at that time I paid half of the cost toward this as a thank you and a present to my partner. I was asked the question about making any home improvements and I answered truthfully that I had contributed to the cost of the kitchen.The debt charity have advised me that their insolvency experts believe this may give me a beneficial interest in the property which might mean a DRO is not granted.

    I have never asked for or wanted any interest in the property. If my partner and I ever decided to separate it was always understood that I would leave and would not ask for anything out of the property. If I had wanted an interest I would have contributed to the mortgage and had my name added to the title deed.

    This is my dilemma. I cannot see any other solution than a DRO because I have not a penny to my name at present and no income in the foreseeable future. I don't want to apply for this if it will be rejected. More importantly I do not want my partner dragged into my mess in any way. These are my debts and not hers. This is her property and not mine and I do not want her ownership or interest compromised in any way as she has paid for this property entirely by herself. It belongs to her. I want no interest in it and have never considered that I have any interest in it. I would rather walk out of the door and live homeless on the streets than compromise her home in this way.

    The debt charity, and I am really happy with their service, have advised me that I couldn't speak with their insolvency people as they don't take calls. I wanted to discuss this matter with them and hammer home that I do not own the property and the improvement I contributed to is what I would regard as minimal. I cannot believe that this might make me ineligible for a DRO.

    Can anyone offer any ray of hope here? I don't know whether to continue with the application or not. My partner will lend me the £90 fee but I do not want to borrow from her if the application will be refused.

    Perhaps someone can advise? Thank you.
Page 1
    • sourcrates
    • By sourcrates 28th Sep 17, 9:03 PM
    • 12,668 Posts
    • 11,998 Thanks
    sourcrates
    • #2
    • 28th Sep 17, 9:03 PM
    • #2
    • 28th Sep 17, 9:03 PM
    Hi,

    You answered yes instead of no.

    It wasn’t your property, you should of answered no to the question.

    Go to another intermediary and answer the question correctly.

    You gave them too much information.
    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/
    • fatbelly
    • By fatbelly 28th Sep 17, 9:22 PM
    • 11,638 Posts
    • 8,774 Thanks
    fatbelly
    • #3
    • 28th Sep 17, 9:22 PM
    • #3
    • 28th Sep 17, 9:22 PM
    The question was asked by the debt charity as to "is there equity in your home" and I answered truthfully that there was huge equity but that it wasn't my home and not my equity
    That's an irrelevant question for a DRO. Even if you owned property in negative equity you would be barred from a DRO as it is gross asset value, not net, that counts.

    The debt charity have advised me that their insolvency experts believe this may give me a beneficial interest in the property which might mean a DRO is not granted
    We've dealt with this nonsense before. The intermediary guidelines talk about established beneficial interest - such as you might have following divorce proceedings at court. Even then it would have to be valued at over £1000 for most people to breach the asset limit.

    The debt charity, and I am really happy with their service, have advised me that I couldn't speak with their insolvency people
    Now I don't know which charity you are dealing with, but just because they are a debt charity, and just because they have insolvency people (they may be licenced Insolvency Practitioners) does not mean they can do DROs. Only the 'competent authorities' in this list can do them.

    https://www.gov.uk/government/publications/getting-a-debt-relief-order/getting-a-debt-relief-order#find-a-debt-adviser
    • sourcrates
    • By sourcrates 28th Sep 17, 11:13 PM
    • 12,668 Posts
    • 11,998 Thanks
    sourcrates
    • #4
    • 28th Sep 17, 11:13 PM
    • #4
    • 28th Sep 17, 11:13 PM
    Try the CAB instead.
    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/
    • Splodge1000
    • By Splodge1000 28th Sep 17, 11:25 PM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    • #5
    • 28th Sep 17, 11:25 PM
    • #5
    • 28th Sep 17, 11:25 PM
    Hi,

    You answered yes instead of no.

    It wasn’t your property, you should of answered no to the question.

    Go to another intermediary and answer the question correctly.

    You gave them too much information.
    by sourcrates
    Try the CAB instead.
    by sourcrates
    Thanks, sourcrates. I am grateful for your assistance.

    That's an irrelevant question for a DRO. Even if you owned property in negative equity you would be barred from a DRO as it is gross asset value, not net, that counts.
    by fatbelly
    I used an online tool provided by the charity - Stepchange - to determine which is the best option for me based on a whole range of questions. This was one such question which I answered as thoroughly and truthfully as I could. The outcome was that a DRO was their recommended option so clearly the issue of non-home ownership had been considered. I then went through their DRO application process but they retained the earlier information and have advised me that if I continue with this that they will have to disclose the information to the Official Receiver.

    As we can see, sourcrates has advised me to go elsewhere and has suggested the CAB.

    We've dealt with this nonsense before. The intermediary guidelines talk about established beneficial interest - such as you might have following divorce proceedings at court. Even then it would have to be valued at over £1000 for most people to breach the asset limit.
    by fatbelly
    That is interesting to know and would perhaps suggest that my minimal contribution would not affect an application for a DRO.

    Now I don't know which charity you are dealing with, but just because they are a debt charity, and just because they have insolvency people (they may be licenced Insolvency Practitioners) does not mean they can do DROs. Only the 'competent authorities' in this list can do them.
    by fatbelly
    As stated above, it was Stepchange but I guess I won't be staying with them through this matter.

    Thank you very much for your input, fatbelly. I am grateful for you taking time to assist me.
    • StopIt
    • By StopIt 29th Sep 17, 7:58 AM
    • 1,449 Posts
    • 1,239 Thanks
    StopIt
    • #6
    • 29th Sep 17, 7:58 AM
    • #6
    • 29th Sep 17, 7:58 AM
    As Fatbelly said, there's more than one charity able to help here and if you contact the CAB debt team, they can look into it.


    However, a DRO is only suitable for those who have a SOA surplus of less than £50 once all bills are paid. If you have 0 income, if you have ANY fixed bills other than debt, it'll put you into negative surplus and you may find you wont be accepted for a DRO.


    There will be workarounds I'm sure, but get in contact with the CAB and work from there.
    • fatbelly
    • By fatbelly 29th Sep 17, 8:18 AM
    • 11,638 Posts
    • 8,774 Thanks
    fatbelly
    • #7
    • 29th Sep 17, 8:18 AM
    • #7
    • 29th Sep 17, 8:18 AM
    However, a DRO is only suitable for those who have a SOA surplus of less than £50 once all bills are paid. If you have 0 income, if you have ANY fixed bills other than debt, it'll put you into negative surplus and you may find you wont be accepted for a DRO.
    Originally posted by StopIt
    A negative surplus is less than +50

    Most of my applications are now done with negative surpluses because if you put reasonable amounts for food and other essentials, benefit amounts don't cover that. I've never had a problem with that from the DRO Team but in the early days did try to avoid it.
    • StopIt
    • By StopIt 29th Sep 17, 8:32 AM
    • 1,449 Posts
    • 1,239 Thanks
    StopIt
    • #8
    • 29th Sep 17, 8:32 AM
    • #8
    • 29th Sep 17, 8:32 AM
    A negative surplus is less than +50

    Most of my applications are now done with negative surpluses because if you put reasonable amounts for food and other essentials, benefit amounts don't cover that. I've never had a problem with that from the DRO Team but in the early days did try to avoid it.
    Originally posted by fatbelly

    Understood!


    Is that a case of reality hitting hard here? I remember people here stating that a DRO wouldn't be advised for those with negative surplus because it was only available for use every 6 years and if you're still losing money, it would mean that a few years down the line the person would be in debt AND unable to use this facility.


    Of course, that didn't make 100% sense either, as it meant turning people away who still needed support.


    Are we going to see more of this happening thanks to the rollout of UC going forward. As you said, lots of people reliant on benefits have negative surplus already, what's going to happen when they get squeezed even further with UC?
    • sourcrates
    • By sourcrates 29th Sep 17, 12:09 PM
    • 12,668 Posts
    • 11,998 Thanks
    sourcrates
    • #9
    • 29th Sep 17, 12:09 PM
    • #9
    • 29th Sep 17, 12:09 PM
    I think a lot of the rules were mis-interpreted by all sides at various points to begin with.

    There appears to be more clarity at present, however, some stories from the stepchange camp seem to counter that somewhat.
    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/
    • Splodge1000
    • By Splodge1000 29th Sep 17, 1:06 PM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    There will be workarounds I'm sure, but get in contact with the CAB and work from there.
    by StopIt
    Thanks, StopIt. I have made initial contact with the CAB and am waiting to hear back from them.

    Most of my applications are now done with negative surpluses because if you put reasonable amounts for food and other essentials, benefit amounts don't cover that. I've never had a problem with that from the DRO Team but in the early days did try to avoid it.
    by fatbelly
    I take it from the above that you are involved in preparing applications for a DRO, fatbelly? Do you work for one of the approved intermediaries?

    There appears to be more clarity at present, however, some stories from the stepchange camp seem to counter that somewhat.
    by sourcrates
    It sounds as if there have been issues with applications from Stepchange. I wasn't aware of this when I approached them for help. Can you enlighten me, sourcrates?

    Thank you all once again for your continued assistance. I am appreciative of every help given.
    • sourcrates
    • By sourcrates 29th Sep 17, 1:51 PM
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    • 11,998 Thanks
    sourcrates
    Fat-belly is a CAB intermediary, just going by his experience with his own clients, step change appear to not of applied the rules across the board at times.

    It appears that some conflicting advice is been thrown around, which helps no one in the end.
    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/
    • Splodge1000
    • By Splodge1000 2nd Oct 17, 12:42 PM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    I have been liaisng with the CAB and hope to apply for a DRO through my local branch.

    One further question. I previously declared myself bankrupt (this was 13 years ago and I was discharged within six months). Will this affect whether a DRO is granted, ultimately? I know that the applicant must not currently be involved in bankruptcy but what about a previous one? This is of course no longer on my credit file but no doubt the Insolvency Service have their own records which go back further.
    • StopIt
    • By StopIt 2nd Oct 17, 12:50 PM
    • 1,449 Posts
    • 1,239 Thanks
    StopIt
    No. You can't apply for an IVA or DRO within 6 years of the last one I think but aside from that it wont make any odds after 13 years. You may have to declare it (Not seen the form, one for Fatbelly that), but it wont be any barrier to you.
    • Splodge1000
    • By Splodge1000 2nd Oct 17, 12:53 PM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    Thanks, Stopit.

    I have some paperwork from the CAB which states a previous bankruptcy as a factor which may affect eligibility or suitability for a DRO which is why I was concerned.
    • sourcrates
    • By sourcrates 2nd Oct 17, 2:35 PM
    • 12,668 Posts
    • 11,998 Thanks
    sourcrates
    Thanks, Stopit.

    I have some paperwork from the CAB which states a previous bankruptcy as a factor which may affect eligibility or suitability for a DRO which is why I was concerned.
    Originally posted by Splodge1000
    It wont stop you from been granted a DRO.

    They will ask the reason why you need to resort to insolvency again though, just be honest, in my case it was a marriage breakup.

    It was accepted fine.
    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/
    • fatbelly
    • By fatbelly 2nd Oct 17, 5:40 PM
    • 11,638 Posts
    • 8,774 Thanks
    fatbelly
    Understood!


    Is that a case of reality hitting hard here? I remember people here stating that a DRO wouldn't be advised for those with negative surplus because it was only available for use every 6 years and if you're still losing money, it would mean that a few years down the line the person would be in debt AND unable to use this facility.


    Of course, that didn't make 100% sense either, as it meant turning people away who still needed support.


    Are we going to see more of this happening thanks to the rollout of UC going forward. As you said, lots of people reliant on benefits have negative surplus already, what's going to happen when they get squeezed even further with UC?
    Originally posted by StopIt
    This is right. We are planned to go live for UC on all new claims over the next 3 months in my area. We are expecting problems. I think the BBC were throwing around a statistic that 84% of UC claimants have rent arrears.

    Splodge - let's hope your local CAB does the job for you
    • Splodge1000
    • By Splodge1000 2nd Oct 17, 8:23 PM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    Thanks, sourcrates and fatbelly.

    In my case the problems have arisen from trying to keep my online business afloat. I was putting money in from credit cards and then using one to pay the other - robbing Peter to pay Paul - until it got out of hand.
    • sourcrates
    • By sourcrates 2nd Oct 17, 8:54 PM
    • 12,668 Posts
    • 11,998 Thanks
    sourcrates
    Sure all will be fine matey !!
    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/
    • Splodge1000
    • By Splodge1000 3rd Oct 17, 8:16 AM
    • 30 Posts
    • 7 Thanks
    Splodge1000
    Sure all will be fine matey !!
    Originally posted by sourcrates
    I am not so sure that it will, sourcrates, as I have learned something this morning which is disturbing.

    One of my creditors had placed a 30 day hold on my account. This has now been extended by a further 30 days. The creditor explained to me previously that charges and interest would be frozen during this period. They now say that this is not the case, charges and interest are being applied.

    The danger is that this may take me over the £20,000 threshold and make me ineligible for a DRO. If the other creditors who also reported freezing my accounts follow suit then I will exceed the £20,000 limit.

    Edited to add: my creditors are not aware that at present I am seeking a DRO.
    Last edited by Splodge1000; 03-10-2017 at 8:28 AM.
    • StopIt
    • By StopIt 3rd Oct 17, 8:29 AM
    • 1,449 Posts
    • 1,239 Thanks
    StopIt
    I am not so sure that it will, sourcrates, as I have learned something this morning which is disturbing.

    One of my creditors had placed a 30 day hold on my account. This has now been extended by a further 30 days. The creditor explained to me previously that charges and interest would be frozen during this period. They now say that this is not the case, charges and interest are being applied.

    The danger is that this may take me over the £20,000 threshold and make me ineligible for a DRO. If the other creditors who also reported freezing my accounts follow suit then I will exceed the £20,000 limit.
    Originally posted by Splodge1000

    Get in contact with all of the creditors who you have this agreement and make sure they're being held as agreed.


    If you go above the DRO limit, you'd be looking at Bankruptcy I'm afraid. Of course that has a higher fee, but the outcomes are basically the same.


    Make sure to get exact totals for your debt to see if you're indeed skating a bit too close to the limit here.
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