Debt Relief Orders (DRO) - Information & help thread

fatbelly

You're in a grey area and I understand why your Intermediary is uncomfortable with your plans. I think I would be reluctant to advise a DRO if someone's income was unstable at the current time.

What I mean is that if you are reasonably likely to be able to earn a good wage (not a contrived low one) in the next few months then perhaps we ought to wait a bit to see how it pans out.

Is there any reason why you have to rush into a DRO, like bailiffs or approaching 15k debt?

Owls-Nick

I am about 13K in debt, and things have reached an advanced stage as I buried my head in the sand like a lot of people in my situation, and have a CCJ - but no threats of bailiffs.

I'm definately not going to earn a good wage - I'm deliberately going to find one as close to the "magic £549" figure as possible - accepting a part time position etc. I just need to know what will be allowed by the Insolvency service. Of course, this does feel like I'm sidestepping the rules, as by paying her £500/month, I'm in essence, increasing her disposable income by the same amount, which she will in all likelihood, spend quite a lot on us.

I want to get the DRO in place as then I can move in with her and know what I'm allowed to earn. I can't move in with her until I get a job, and if I get a well paid job, the DRO will become invalid

fatbelly

Owls-Nick wrote: »

Oh dear

If it goes on household income, then I'm stuffed. She already has quite a lot of disposable income, and her car is worth well over £1000- she just lets me drive it.

(Oh - and on another note - we got engaged on the same day )

No it's not done on household income and her car is her car not yours!

You can get your £90 refunded if necessary as long as the DRO has not been submitted. Or it can just sit there.

Congrats on the engagement btw

Owls-Nick

Peeps, can you read my previous post and give your opinions please?

Much appreciated

wba31

Owls-Nick wrote: »

I am about 13K in debt, and things have reached an advanced stage as I buried my head in the sand like a lot of people in my situation, and have a CCJ - but no threats of bailiffs.

I'm definately not going to earn a good wage - I'm deliberately going to find one as close to the "magic £549" figure as possible - accepting a part time position etc. I just need to know what will be allowed by the Insolvency service. Of course, this does feel like I'm sidestepping the rules, as by paying her £500/month, I'm in essence, increasing her disposable income by the same amount, which she will in all likelihood, spend quite a lot on us.

I want to get the DRO in place as then I can move in with her and know what I'm allowed to earn. I can't move in with her until I get a job, and if I get a well paid job, the DRO will become invalid

Firstly, why can you not get a DRO as a potential stop gap, so if you enter the DRO, and 6 months in you get yourself a mint job, then creditors have been off your case for 6 months, and then you can re-evaluate your options then? If your partner has surplus income already, and you can earn a decent amount, it wouldnt take long to clear £13k in a free DMP

I dont think it is as simple as you saying "I earn £549 and can just give her £500" Intermediaries need to know that the income and expenditure is accurate and realistic, almost faking a budget like that is not right in my eyes, and if I was doing your DRO, I would encourage you to look a bit closely at the budget and how it will work out. when you move into her property, the council tax and food, as a start, will increase, so her costs will already be more than £1000, and how are you going to get to and from work? will there be a cost involved? my other issue, is that if you earn 1/3 of the household income, how is it right that you pay 1/2 of the expenditure. If a creditor saw they were not getting paid because this was the position, they may not be too happy about it...

However, I'm not saying a DRO is not for you, clearly, right now it is, but I also think you need to be real and accept that if you get a job during the 12 month moratorium period, it may have to be revoked and you may need further advice. The other issue, and dont get me wrong when i say this, is who's to say you will find a job in 12 months?

The car is fine by the way, as it is not yours, so ignore that whole rule.

Owls-Nick

Thankyou for your reply wba.

So I guess the issues are my proportion of the household income? So it's not a straight 50-50 then?

I have actually (I think) gone into quite a lot of work in getting to my figures, despite making them look simplistic above.

I've looked at her basic household costs, added in the increase in council tax, utility bills and groceries. I've also added in travel to/from work, as well as child maintenance.

This has given me my magic figure that I will be allowed to earn. I've then worked out what the annual salary will be (allowing for any NI and tax deductions) to come up with a salary entitlement.

The thing is - my partner is more than happy for me to move in, provided I contribute in some way, but obviously I wanted to know an upper limit to the salary expectations that I have so I don't earn too much.

(Incidentally, the DRO has been paid for, and I'm seeing my advisor in 3 weeks)

fatbelly

The way I see this is that you seem very sure that soon (within the next few months) you will have a new income and new expenditure so it boils down to two options.

1. Do a DRO now, on your present situation. This would be accepted. Then when the new situation pans out YOU contact the DRO Unit and discuss your magic figures. If it's revoked, you do a dmp and it's six years before you can apply for another DRO.

2. Wait until the new situation is in place and then discuss the figures with your Intermediary. If THE INTERMEDIARY (with a clear conscience) presents your figures and submits a DRO, then it would be accepted and you have your remedy. If the AI advises not to go for it, you can do a dmp and, if things later go wrong, you still have the ability to enter a DRO.

Owls-Nick

Fatbelly, I hope you take this post in the way I mean it - in other words, be honest in what you mean (you won't offend me - honest!)

It's the "clear conscience" bit you did. I expressed earlier, that it does somehow feel like I'm sidestepping some rules- does what I'm doing leave some distate? Am I approaching this wrong (in your opinion?)

I'm still unemployed, and am trying to get out of the situation I am in. I'm looking at getting a very low paid job, but like most of us, aspire to earn as much as we can. However, I see it that as soon as I go over my magic figure, my £13K debt will come back into play, and will probably end up being worse than if I just stay in my low paid job.

I must admit, I don't know what a DMP is (I came on here and went straight for the DRO section as that was relevant to me, but I'll look it up - thankyou)

wba31

Owls-Nick wrote: »

Fatbelly, I hope you take this post in the way I mean it - in other words, be honest in what you mean (you won't offend me - honest!)

It's the "clear conscience" bit you did. I expressed earlier, that it does somehow feel like I'm sidestepping some rules- does what I'm doing leave some distate? Am I approaching this wrong (in your opinion?)

I'm still unemployed, and am trying to get out of the situation I am in. I'm looking at getting a very low paid job, but like most of us, aspire to earn as much as we can. However, I see it that as soon as I go over my magic figure, my £13K debt will come back into play, and will probably end up being worse than if I just stay in my low paid job.

I must admit, I don't know what a DMP is (I came on here and went straight for the DRO section as that was relevant to me, but I'll look it up - thankyou)

I think you are approaching it wrong, but maybe for a different reason you may think. I think you need look at your situation now. if you are eligible for the DRO, the only variable in your future is a job you might or might not get, and the subsequent budget. Any advisor worth their salt will help you as much as they can if or when that change happens, but unless i've misunderstood at the moment, you dont have a job offer on the table, so there is no certainty that this is going to change in the next 12 months. The other thing is, where are you living now? if on your own, when working, and earning anything, will that income be subsumed by all living costs? if so, can you hold off moving in with your partner a little bit.

A DMP is a repayment plan that you can set up with a charity (or fee charger if you choose) as a way of repaying your debt. They are set up when you cannot afford the monthly payments, but the payment you make to them is a payment you can afford based on your budget. CCCS are the largest provider of DMP's, and as a charity they will do it for free, so you make 1 payment a month to them, and they distrubute 100% of that money to your creditors. i believe they also contact all of your creditors for you to tell them your position and to ask them to co-operate.

Owls-Nick

Another 2 things pertinent to my situation. My partner lives quite some distance away from me (approx 50 miles) which affects how often I can see her, so moving in is really important to me.

I currently live in a privately owned house, which I claim housing benefit for. I mentioned to my landlady that "at some time I would be moving in with my fiance!" - and as a result - she's not renewing my tenancy when it runs out mid-October, so I'll have to move anyway (me and my big mouth!)

I'm quite confident in getting a job, even if it only pays £50/100 a week, it's £200/£400 I can contribute to the household. The only thing that will go against me, is my CV shows that's I've had some well paid jobs in the past, and the fact that I'm looking for such low paid work could look suspicious to prospective employers.