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  • FIRST POST
    • Josh18
    • By Josh18 11th Jan 18, 2:41 PM
    • 1Posts
    • 0Thanks
    Josh18
    Dro
    • #1
    • 11th Jan 18, 2:41 PM
    Dro 11th Jan 18 at 2:41 PM
    Hi all this is my first post.
    Please I need your advice asap. I have loans between 10-15k from different loan companies, I have 2 defaults, one coming off this year and the other one next year from payday loans years ago. My problem is I am seriously struggling making my monthly loan payment and it's affecting my health and family. I've been reading post from others about DRO. Please do i go through this channel and back again for another 6 years on my credit file or are there any other options i can take? Your soonest and honest advice is highly appreciated.
Page 1
  • National Debtline
    • #2
    • 11th Jan 18, 4:03 PM
    • #2
    • 11th Jan 18, 4:03 PM
    Hi Josh18 and welcome to MSE,


    It is difficult to say whether a DRO is the better option and it is understandable that you would have a concern about your credit file if the defaults are about to drop off. However, in reality, you will struggle to rebuild your credit file until you are actually debt free anyway, so if you are only making small repayments it could take years to be debt free and more time to rebuild your rating.


    The key thing is whether or not you meet the criteria. To qualify for a DRO you need to owe less than £20,000 of debt, have less than £50pcm available for the debts and have less than £1000 worth of assets (plus you are allowed to have a car that is also worth up to £1000).


    If your application is successful then a DRO means that for 12 months you do not pay your debts, you would have restrictions placed on you during this time (known as a moratorium), and if after the 12 months you are in the same financial position (i.e. that you still have less than £50pcm for your debts), the debts are written off and you are no longer liable. It is a form of insolvency and can affect other things, such as some private tenancies, employments (within certain industries) and even immigration status. It also costs a one off fee of £90 and you must meet the rules for the full 12 months. Please bear in mind though that a DRO is very damaging to your Credit Reference File and can affect you getting credit over the next 6 years and possibly beyond that as well.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
    • fatbelly
    • By fatbelly 11th Jan 18, 9:49 PM
    • 11,790 Posts
    • 8,887 Thanks
    fatbelly
    • #3
    • 11th Jan 18, 9:49 PM
    • #3
    • 11th Jan 18, 9:49 PM
    Hi Josh

    Basic criteria for a DRO:


    •Must not be a homeowner,

    • Debts less than £20,000,

    • Can have a car worth up to £1000,

    • No other assets of more than £1000,

    • Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

    • Cannot have had a DRO in last 6 years.

    Do you meet those criteria? If so, repaying your 15k debt is going to take at least 25 years and so yes you should do a DRO
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