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Debt Relief Orders (DRO) - Information & help thread

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  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    edited 14 April 2009 at 4:35PM
    ASSETS
    The gross value of a client’s assets must not be worth more than £300. This means that
    homeowners with a property worth more than £300, (even where there is negative equity) will not
    qualify for DROs.
    It is the client’s property which counts. Any jointly owned goods should be split 50/50 unless the
    client advises ownership is held in another way.
    Assets will include things like savings, shares, cars, caravans, antiques, and collectables.
    If the client has an established beneficial interest in someone else’s property then this will count as
    an asset. The fact of the beneficial interest must be evidenced in some way. For example where
    there is a written agreement between the parties.
    Some assets will be disregarded.
    Disregarded assets
    The rules state that some types of property will be disregarded for the purpose of
    determining the value of the client’s property. These are:

    1.
    “such tools books and other items of equipment as are necessary to the debtor for use

    personally by him in his employment, business or vocation.”
    and
    2.


    “such clothing, bedding, furniture, household equipment and provisions as are

    necessary for satisfying the basic domestic needs of the debtor and his family.”
    and
    3.


    a car which has “been specially adapted for use by the client because he or she has a

    physical impairment that has a substantial and long term adverse effect on his or her
    ability to carry out normal day to day activities” Note: this definition of disability comes
    from the Disability Discrimination Act
    or
    4.


    One domestic motor vehicle up to the prescribed value - the prescribed value is

    currently £1,000.
    For the purposes of a DRO a ‘motor vehicle’ includes a registered vehicle such as a car,
    motorbike or scooter.
    Please note that the list of disregarded assets does not include vehicles to be used in
    employment business or vocation. This means that for example a self employed person with a
    work van worth more than £300 will not qualify.
    For points 1, 2 and 3 above, if the asset is worth more than the value of a reasonable


    replacement then the value of the reasonable replacement will be disregarded instead.
    Hi,
    This is from the intermediaries training manual. Pensions never get a mention as assets.Income from a pension counts towards income / exp assessment and £50 disposable income limit.
    I would think any lump sum would count towards the £300 assets limit.
    Enjoying my week off during DRO introduction week !:D

    IMPORTANT; SEE FURTHER POSTS REGARDING PENSIONS
    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 ***
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    This is from the intermediaries training manual. Pensions never get a mention as assets.Income from a pension counts towards income / exp assessment and £50 disposable income limit.

    I would think any lump sum would count towards the £300 assets limit.

    Enjoying my week off during DRO introduction week !:D

    That is taken almost word for word from the Statutory Instrument/updated Insolvency Rules by the looks of it.

    Did you time that deliberately DD? ;):D
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    fermi wrote: »
    Did you time that deliberately DD? ;):D

    YES !-

    Ive said earlier that I am not happy processing any DRO'S until I am confident in the information before me. Interesting thing is though, I have no choice, as an intermediary MUST process an application even if they think the application will be refused ie they have £20k of debts or £100 of surplus income, if thats what the client wants.

    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 ***
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    No surprise there then, but apparently this came down from above yesterday, so may be an addition, or a mistake:confused: who knows:rolleyes:

    A lot of things "come from above", including a shower of ****.:p

    Seriously though, if there is unpublished guidance then we have to wait until someone comes up against it or they do publish it.

    I would suggest calling the IS enquiry line, but I don't altogether trust answers from them.:rolleyes:
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    What amuses me is that this mess is the result of a two year consultation between the IS, BERR, CAB, NATIONAL DEBTLINE, CCCS, MONEY ADVICE TRUST, INSTITUTE OF MONEY ADVISERS etc.

    We could have ran a thread on here over two weeks and I'm sure we would have come up with a system with far less holes and uncertainty than what we have at the moment.

    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 ***
  • fermi
    fermi Posts: 40,542 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker Rampant Recycler
    DROs and bankruptcy get a mention here:

    http://downloads.bbc.co.uk/podcasts/fivelive/money/money_20090406-0628a.mp3

    From 13 mins and 30s onward.

    12 Mb download.
    Free/impartial debt advice: National Debtline | StepChange Debt Charity | Find your local CAB

    IVA & fee charging DMP companies: Profits from misery, motivated ONLY by greed
  • debt_doctor
    debt_doctor Posts: 4,595 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    :confused: What! :eek:

    Whats the point of it going through intermediary if the client can just ignore you and go ahead anyway :confused:

    I thought the whole point of a intermediary was to stop claims that could not sucseed going through in the first place:confused:



    Insolvency Rules 1986
    The Insolvency (Amendment) Rules 2009 (which amends the Insolvency Rules 1986 and inserts
    new rules) sets out what an intermediary must do and what s/he may do. Under Rule 5A.5 there
    are 4 things an intermediary MUST do. These are:
    1. Create an application when requested by a person who proposes to make an application for
    a DRO. This means that even where it appears that a client will not or may not qualify for a
    DRO, an application must still be made if this is what the client requests. The intermediary will
    be able to indicate on the application that the form is being submitted despite advice to the
    client that the application may be unsuccessful
    2. Draw the client’s attention to all the conditions which need to be met in order to qualify for a
    DRO and the conditions which will apply to a client after a DRO has been granted, i.e. duties
    and restrictions
    3. Draw the client’s attention to the possible consequences, of making any false representation
    or omission in the application. For example:
    It could lead to
    prosecution as an offence if it is done knowingly or recklessly
    the DRO being revoked
    a Debt Relief Restrictions Order
    Any qualifying debts which aren’t included in the application will not be included in the
    DRO. Because this is the case, it is advisable for the client to obtain a credit reference
    report before an application is completed
    4. Draw the client’s attention to verification checks which will be made by the Official Receiver,
    following an application for a DRO, to check that the client meets the qualifying conditions
    and explain that s/he will be required to consent to checks being made. These checks will
    verify whether or not the client:
    has a connection with England and Wales
    is an undischarged bankrupt
    is subject to an IVA or interim order
    has had a DRO in the past 6 years
    is subject to a Bankruptcy Restrictions Order /Undertaking or a Debt Relief
    Restrictions Order/Undertaking
    has a bankruptcy petition pending against her/him and, if so, the status of these proceedings
    has provided accurate information about the amount of debts, income and value of property


    Rule 5A.5 goes on to list 3 things an intermediary MAY do, rather than MUST do (although in
    practical terms, they will most probably form part of the role of an intermediary).
    They are:
    1. Assist to identify what information is needed to complete an application and
    2. Based on documentation provided by an applicant, assist in ascertaining whether s/he
    appears to have debts of £15,000 or less, surplus income of £50 or less per month and
    property worth £300 or less and
    3. Assist in ensuring that an application is completed in full.

    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 ***
  • elfieb
    elfieb Posts: 530 Forumite
    I believed to be able to apply for the DRO myself via the net. I rang National Debt Line yesterday at 9.30am, only to be told the first telephone appointment with an intermediary is the 23rd April!!!!
    Would be so much easier if a person could just apply themselves!!
    I used to be Snow White, but I drifted.
    Mae West
  • mazzatee
    mazzatee Posts: 130 Forumite
    Hi Elfie

    The reason there is a long wait for an appointment is that you have to send in a copy of your credit file, proof of income, etc before the form can be completed.

    Part of the Intermediary's duties are to prove income & ensure that all debts are included, hence reason for credit file, before submitting application to minimise risks of DRO being revoked.

    You can complete the forms yourself online but you have to print them and then send to a competent authority to actually submit to OR's office - perhaps you want to do this if NDL not already registered you.
  • Hi BAB

    You have to speak to an intermediary initially for them to register you and generate a bar coded letter for you to take to a Payzone outlet to pay the fee. Once you have been registered you will be able to access the website with your application number and complete the application form but an intermediary will still have to click the button to actually submit the application
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