Debt Relief Orders (DRO) - Information & help thread

mickyc_3

hi guys,

please excuse my bone headedness but i'm in the process of breaching my IVA, once its breached then i won't be in any insolvency plans and can apply for a DRO? my OH and I owe £16,500 between us and our only income is benefits and my military war pension so if we are able to apply for this its a godsend!

debt_doctor

North_East_Derbyshire_CAB wrote: »

Hi all,

On the issue of pensions here is a quote from the latest (V2.0 April 09) Insolvency Service Intermediary Guidence notes (bottom of page 30 for those who have access).

Please Note - If the applicant has a pension fund , the intermediary will need to satisfy themselves that the FUND VALUE does not exceed £300 and consequently preclude the debtor from applying for a DRO.

There are implications here and it looks like pensions will have a significant effect on whether someone qualifys for a DRO.

NED-CAB

Thanks NED CAB,

I wont have access to that until Tuesday, but is very alarming from what you say. Pensions never got a mention in any of the DRO training we received.

So even if, say, you opted out of SERPS in the 80's you cant have a DRO ??:eek:

DD

dalip

Yes DD that counts us out:mad: as hubby did exactly that, opted out of serps and has a private pension!

fermi

That is just NUTS!

So people will be forced to go bankrupt instead, in which any HMRC approved scheme is exempt. :rolleyes::rolleyes::rolleyes::rolleyes:

PlasticPennies

blind-as-a-bat wrote: »

The more i learn of DRO's the more they seem to be a cosmetic change that will benefit fewer and fewer

Adding this 3 days after the launch shows how ill thought out DRO's are:rolleyes:

If they acheive nothing else, DROs will help to decongest county courts that have been complaining about the amount of time they spend processing bankruptcy cases.

Maybe that is justification enough for some people

fermi

blind-as-a-bat wrote: »

If thats what they wanted to achieve, why not just cut the court bit out

It serves no purpose that i can see in any practical way:rolleyes:

That is under consideration I think.

EDIT: http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/con_doc_register/Initialstageconsultationpaper.doc

PlasticPennies

TokSik wrote: »

You need to be aware that although you owe £14K now, at the end of the 12 month moratorium, that £14K may have attracted interest and additional charges from the creditors within the total, which may bring the total above the £15K limit, which would cause it to be revoked (after which you'll lose your fees and be back to square 1), so do your maths carefully before you pay your £90 fee (each).

Hi,

Think you might have got the wrong end of the stick there. You are right that people have to be very careful if they are near the £15,000 limit because interest and cahrges could be added, but provided they are under the £15,000 limit on the day the order is approved then there will not be a problem.

Interest and charges can still be added to a debt during the moratorium period, but even if the interest brings the debt over £15,000, the total amount owed (ie the amount owed on the day of the order and any subsequent charges and interest) will all be discharged.

So technically, it is possible to have more than £15,000 of debt discharged by a DRO, but you must not owe more than £15,000 at the time the order is made.

PlasticPennies

fatbelly wrote: »

Applications are per person so if you each owe less than 15k then you're over that particular hurdle.

I agree with that, but they need to be careful, because they cannot split joint debts between them.

If you have £14,000 debts in your sole name, and your partner has £14,000 in her sole name, you will both be able to apply for a DRO.

But if you have joint debts of more than £15,000 (ie both your names are on the debt) then neither of you will be able to apply for a DRO.

PlasticPennies

Hope those two posts make sense, I've had a bit of wine this evening.

PlasticPennies

That's an interesting article, fermi, thanks.