Debt Relief Orders (DRO) - Information & help thread

fermi

I can't see why an "asset" that would not be claimable in BR like that should be a bar to a DRO.

Makes no good sense?

But I have not looked into DRO's as much as I meant to. I'm not sure I was ever 100% convinced they were going to happen. :rolleyes:

PlasticPennies

Godiva500 wrote: »

Hi
I intend to apply for DRO this coming week. The problem is that 2 large items have recently packed up on me. My cooker is very old(inherited and about 10 years old), and has just gone bang, and i desperately need to replace it, and my settee ( about 15 years old) has a cracked frame and is falling apart. How would it be viewed if i bought these 2 items now on a CC, before the DRO? Would the CC people contest this? I do not wish to be thought of as dishonest and playing the system, but we really do need them now. If i leave it, it will be at least another year or more before we can afford new ones again. We cannot manage for that long without them.
Not sure what to do, so advice please.

Another intermediary here with my thoughts. Depends how vigilent the CC people are, but if they go over your transactions when they are notified of the order, they will probably object to the order being made if they see you using large sums of credit immediately before applying for a DRO. If they can convince the insolvency service that you had no intention of paying that money back when you took it out, (fraud) then your DRO will be revoked.

The onus is on the CC people to do that though, and they'd have to make a good case against you, because the insolvency service has no duty to investigate, and will probably be inundated with creditors making bogus accusations against people applying for DROs anyway.

PlasticPennies

JCS1 wrote: »

And following on from this, if pension is an asset, what about life assurance?

Pretty sure life assurance is not an asset. I'd argue that it's essentially held on trust for someone else, and not the property of the policy holder.

Pensions definately are assets though, and I can't understand the thinking behind that.

JCS1

PlasticPennies wrote: »

Pretty sure life assurance is not an asset. I'd argue that it's essentially held on trust for someone else, and not the property of the policy holder.

Pensions definately are assets though, and I can't understand the thinking behind that.

But Life Assurance is considered an asset in bankruptcy

And the vast majority of pensions are exempt in a BR

PlasticPennies

JCS1 wrote: »

But Life Assurance is considered an asset in bankruptcy

And the vast majority of pensions are exempt in a BR

I know, it's clear as mud isn't it?

fermi

PlasticPennies wrote: »

Pensions definately are assets though, and I can't understand the thinking behind that.

That is very odd, considering the stance taken for full blown bankruptcy.

It almost as if you should be penalised for going the DRO route rather than BR?

I thought the point was to give poeple a more proportionate choice?

So_Sad_Angel

blind-as-a-bat wrote: »

Just been told by another intermediary that the IS has anounced to them today that if you have more than £300 in a pension pot you will not be able to go for a DRO, Has this been mentioned before and i missed it, i dont think it has

If not and its correct and not another missunderstanding (which i doubt)any more info on this is needed, is it included as an 'assett' or seperate?

I`m not a pensions expert but been looking into mine at the moment & although a pension has monetary value it is essentially held by a nominated trustee ( the pension provider) & does not become accessible by the beneficiary until certain age, certain ill health issues or death ....the latter resulting in pension being payable to the spouse/partner in most/some cases.

If that is so then how can a 3rd party, the Insolvency Service , take monies that the beneficiary is not officially entitled to unless such conditions arise?

I agree that if the pension is available ie over retirement age/illness etc then if there is a lump sum available then that would be an asset....however likely to exceed £300 anyway so debtor may as well/have to take the BR route.

Would be interested in some clarity on this.

Angex

NeedToWorry?

In full BR, a recognised and approved pension scheme is not regarded as an asset... are they saying that for a DRO, a approved pension IS now an asset? Or are they talking about private pensions?

fermi

Well, an unscientific search via google seems to suggest that one of the barriers to being accepted for (or that may cause trouble during) a DRO is "making excessive pension contributions".

If that should be true, then surely the pension itself cannot be a barrier?

I can only imagine that they will be looked at in much the same way as they currently are in bankruptcy. That is the only sensible provision as far as I can see.

fermi

Well, I see no mention of pensions as an asset or their contributions anywhere is the legislation or the IS's guide.

http://www.opsi.gov.uk/si/si2009/uksi_20090642_en_3#sch1

or

‘Guide to Debt Relief Orders’.