Debt Relief Orders (DRO) - Information & help thread

Nathcrow

I have read with interest all information I can find regarding DRO's, I would value opinions on my scenario;

13K debts spread across a loan, 3 credit cards, an overdraft and a couple of debt collection agencies who I pay £20 a month to.

My partner & I both work, me full time, her part time. We have 2 young kids. Until recently I kept telling myself that I was on top of things financially but have come to the realisation that I am not at all. I have never missed payments on any of my cards/loans, but only because I am using my overdraft to pay them, the overdraft is slowly getting worse month by month no matter how hard I try to budget and the credit cards are not going down at all.

We live in a council house and our car is worth under £1000.00

My main concern is that I have read that DRO's are for those on a "relatively low income", this seems very ambiguos, relative to what? our household income is around £2000 per month including my wages, my partners wages and CHB/CTC. Is a DRO not likely to be an option for us?

I have also read that you have to prove by way of a common financial statement that you have £50 or less disposable income after reasonable household expenditure. I have downloaded a Common Financial Statement from the CAB site and filled it out as honestly as I can indicating weekly food shopping of £140.00 for the four of us and £120.00 per month for clothing for the four of us, does this sound reasonable?

dvs

Nathcrow

Complete the statement of affairs calculator and post back here and I'm sure we'll be able to assist you on your allowances for outgoings. (It's probably best to start a new thread titled something like 'SOA - please help' as you'll get more responses).

elfieb

Anyone got any further info to add on DRO, seeing as there is less than a week until they come into action?

fermi

Update on the IS website:

Debt Relief Orders come into force on 6 April 2009

a. Debt Relief Orders (From 6 April 2009)

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

• 
  
• I am interested in obtaining a Debt Relief Order
• I am owed money by someone with a Debt Relief Order
• Frequently Asked Questions

If you still have any queries regarding DROs you can call The Insolvency Service Enquiry Line on 0845 602 9848.

fermi

Info from IS website:

Debt Relief Orders come into force on 6 April 2009

a. Debt Relief Orders (From 6 April 2009)

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

• 
  
• I am interested in obtaining a Debt Relief Order
• I am owed money by someone with a Debt Relief Order
• Frequently Asked Questions

If you still have any queries regarding DROs you can call The Insolvency Service Enquiry Line on 0845 602 9848.

fermi

Info from IS website:

Debt Relief Orders come into force on 6 April 2009

a. Debt Relief Orders (From 6 April 2009)

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

• 
  
• I am interested in obtaining a Debt Relief Order
• I am owed money by someone with a Debt Relief Order
• Frequently Asked Questions

If you still have any queries regarding DROs you can call The Insolvency Service Enquiry Line on 0845 602 9848.

fermi

Stickied for now..............

debt_doctor

blind-as-a-bat wrote: »

I can only assume the OR will use the same figures for assesing I&E as they do for normal BR.[URL="http://"][/URL]

Hi,

It is not the same figures or guidlines. As said earlier it is expenditure based upon the common financial statement. There are no allowances for holidays or haircuts and all income counts, including child benefit.

DLA apparently goes in then is removed as a similar amount for care needs.

Ive had my DRO training and I am now a licensed intermediary. I have to say i'm not impressed and as I suggested earlier I shall not be processing ANY DRO's until im satisfied that I can give full and accurate advice, and in my opinion no one can do that at the moment.

My licence and my membership of the money advice trust forbid me from posting the allowed amounts within the common financial statement (CFS) on this site.:eek:

As below;


Trigger figures

What are the trigger figures?

Central to the CFS are the trigger figures. These were coordinated by the CFS working party and have recently been updated. They represent pre-agreed levels for certain areas of discretionary expenditure. The trigger figures help creditors and money advisers to identify levels of monthly expenditure which, unless exceeded, are deemed reasonable and will not require comment or explanation. This means that if a financial statement includes items of expenditure that are either at or below the level of the appropriate trigger figure, money advisers can expect that their payment offer should be accepted.

There are trigger figures for telephone, travel, housekeeping and 'other' costs. Categories of fixed expenditure such as rent and mortgage payments do not have their own trigger figure, because what people spend on these items varies widely from household to household. Also, it is rarely possible to have any real control over these expenditure levels.



How can I find out how much the trigger figures are?

To protect the integrity of the CFS, the trigger figures cannot be made publicly available. Money advisers can gain access to the trigger figures either through the budgeting or case management software used by their organisation, or via a licensing agreement with MAT. By signing up to the licence agreement, an organisation is undertaking to protect the integrity of the trigger figures and use the CFS only in line with the forms and guidelines issued by MAT.

The licensing agreement is free, and organisations wishing to apply for a licence can do so here. Applicants requiring access to trigger figures will need to tick a box to accept the licence terms, which will trigger an email to MAT. Subject to the applicant's eligibility, MAT will then issue a licence key which will allow the applicant, again via the website, to see the trigger figure elements.

A licence number will also be issued, which will appear on the CFS Summary that is sent to creditors. Creditors will therefore have reassurance that the trigger figures have been obtained through MAT.



How were the trigger figures arrived at?

Research from the Government's Family Expenditure Survey was used to inform the level set for the trigger figures. The Family Expenditure Survey is based on a random sample of lower-income UK households and is produced by the Office for National Statistics.

The CFS working party is confident that the changes that have been made to the trigger figures, make the CFS a much more realistic budgeting tool; responsive to the needs of families of different sizes. Trigger figure amounts will be reviewed on a regular basis.

DD

CCCS_Matthew

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.

VanillaDelia

Hi just a Q. I have just started a DMP with CCCS with my husband, but my total debt personally to me are £10K so would this be the best option for me, as I only earn about £100 a month self employed. The car is in Husbands name so I dont own the car and have no assets such as a house, savings etc..

Will this effect my business even though i have no money in it, will it effect my current bank account as non of my debts are with my bank and i have had good standing with them.