Debt Relief Orders (DRO) - Information & help thread

DelhiBelly_2

I can assure you that cars under £1000 are always an exempt item.

Disregarded vehicles in a DRO are stated as "one domestic vehicle up to the prescribed value (currently £1000)" which does not include vehicles to be used in employment, business or vocation. This means that a self employed person with a work van worth more than £300 will not qualify.

Just thought I would mention this as would mean a lot of self employed people would not qualify.

mazzatee

Hi All Posters
Have read through this thread and a number of queries were raised. I have now had training on DROs & would reply as follows:

Cars on HP - HP is included as a debt on DRO so would then lose car.

Fees by instalments - has been mentioned & is correct that cannot file until whole fee paid. By paying by instalments please remember interest & charges can be added & could push you over the £15000 limit.

Someone mentioned savings of £600 - this is an asset so would be excluded from DRO as assets then over £300.

CCJs can be included in DRO

If debts are not included in DRO then cannot be added afterwards but if that debt pushes total over £15K then DRO will be revoked & person will have to consider bankruptcy or other option. Fee will NOT be returned if DRO revoked.

Cars are exactly as DelhiBelly says under £1K on Parkers for domestic use are ok but works vehicles not.

Also remember if circs change & surplus goes over £50 then DRO will be revoked, fee lost & you will have to make other arrangements to repay creditors. You can ask for 3 months protection under DRO to make new arrangements.

DelhiBelly_2

The training material that has been provided to debt advisers by Money Advice Trust definitely states that HP and Conditional Sale agreements are being treated as unsecured and only those secured by a bill of sale will be treated as secured debts.

As to the reasons why HP agreements are being treated differently under bankruptcy and DRO....your guess is as good as mine and it certainly came as a surprise to me!!

mazzatee

HI BAAB
The training material I have states that HP/Conditional sale debts are included for DRO purposes - as well as unsecured debts and any unliquidated sum (usually means buy now pay later). This has been specified by the Insolvency Service but dont know their reasoning behind this.

I presume it will mean that people could lose the car and then have more than £50 surplus income - so then ineligible for DRO??!

Pepzofio

mazzatee wrote: »

Hi All Posters

Someone mentioned savings of £600 - this is an asset so would be excluded from DRO as assets then over £300.

...

Cars are exactly as DelhiBelly says under £1K on Parkers for domestic use are ok but works vehicles not.

OK, Let me get this straight -

£300 assets -

• Is this the total value of your assets or the limit for individual items? (Seems to be total value if I've read previous posts correctly, but this seems incredibly low...)
• Does anyone know what items (if any) are disregarded - e.g. clothes/basic furniture/cooking utensils/tools of your trade etc?
• I'm assuming it's resale value rather than original price that they're talking about?

£1k vehicle limit - have I got this right?

• If you don't need a car for work then as long as it's worth less than £1k it's safe...
• But if you need it for work then it's got to come within the £300 limit or you lose it...????
• Does this just mean vehicles used exclusively for work, or if you used your personal car for work purposes?
• What about a car to get to & from work?
• Value is taken from Parkers/Glass' guide (i.e. trade value)

I've also read that conditions include:

"No transaction at an undervalue within past 2 years"

and

"No preference given to any creditor in the last 2 years"

I'm assuming the latter is referring to someone clearing or paying a lump sum off a debt in order to bring total debt under £15k (rather than splitting money pro-rata), but what does the first one mean???

Also, if someone has only been servicing some debts and ignoring others - which quite often happens, especially with forgotten debts - would they disqualify themselves under the 'creditor preference' criteria?

As others have said, considering these are 'going live' in under a fortnight, there seems to have been precious little thought gone into these criteria!!

...Or has it been done on purpose? A grand 'gesture' from the Govt which is essentially empty as everyone seems to be disqualified under one rule or another!!

dalip

debt_doctor wrote: »

Am I back to this ? - :A :rotfl:

DD

Yes DD. if you read your e-mails you could be:A :A :A

fatbelly

New factsheet from National Debtline:

Factsheet Debt Relief Orders

The only omission I spotted on a quick read-through is that payments towards the £90 fee can be made at Post Offices as well as Payzone outlets.

Also, have Paypoint been added in? They are not mentioned in the guidance notes v.029

fatbelly

blind-as-a-bat wrote: »

Sorry not relevent really but anyone else find this comment a tad odd

Payzone outlets ar few and far between in rural areas. It makes more sense if people can pay at Post Offices and I believe they are now part of the scheme but not mentioned in the ND factsheet. Why is that odd?

Sorry, you meant the bankrupt quote - yes OK that is a bit odd!

peachyprice

Pepzofio wrote: »

...Or has it been done on purpose? A grand 'gesture' from the Govt which is essentially empty as everyone seems to be disqualified under one rule or another!!

The hoops people are going to have to jump through to be accepted, and remain accepted it's begining to look like that :rolleyes:

debt_doctor

Hi, Bat seems to think that the DRO system is full of problems - and the more I learn about them the more I agree with him.

I was happy with the idea thats behind the DRO but the powers that be seem to have made a relatively simple idea in to a nightmare. I am to receive my formal DRO training next week. I am fast becoming of the opinion to refuse to process any DRO'S until I can be absolutely sure that I am acting in the best interests of my client.

Ill let you know how the training pans out - if you have any fairly short questions you want asking ill try to get a response.

DD