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Debt Relief Orders (DRO) - Information & help thread

edited 13 March 2019 at 3:26PM in IVA & DRO
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fermifermi Forumite, Board Guide
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edited 13 March 2019 at 3:26PM in IVA & DRO
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  • edited 27 April 2011 at 9:59PM
    debt_doctordebt_doctor Forumite
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    edited 27 April 2011 at 9:59PM
    Hi all, and a very happy new year to everyone.:beer:

    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 ***
  • k2ngak2nga Forumite
    1.4K posts
    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?
    :cheesy: K2nga :cheesy:

    BSC Member 176
    BR 23/06/08
    ED 22/01/09
    Credit file BR fall off date: 24/06/14 :beer:
  • DON79DON79 Forumite
    3.8K posts
    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.
    BSC #215/No.1 Jan 09 Club
  • debt_doctordebt_doctor Forumite
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    Hi K2,

    Yes discharge after 1 year, credit file 6 years as you say.
    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 ***
  • peachypricepeachyprice Forumite
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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.
    Accept your past without regret, handle your present with confidence and face your future without fear
  • 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:
    SA
    2011 - New year, New start, New me
    [STRIKE]Planning on [/STRIKE] making my dreams a reality
  • k2ngak2nga Forumite
    1.4K posts
    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?
    :cheesy: K2nga :cheesy:

    BSC Member 176
    BR 23/06/08
    ED 22/01/09
    Credit file BR fall off date: 24/06/14 :beer:
  • debt_doctordebt_doctor Forumite
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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
    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 ***
  • fiveyearplanfiveyearplan Forumite
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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.

    :j :j


  • k2ngak2nga Forumite
    1.4K posts
    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
    :cheesy: K2nga :cheesy:

    BSC Member 176
    BR 23/06/08
    ED 22/01/09
    Credit file BR fall off date: 24/06/14 :beer:
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