Debt Relief Orders (DRO) - Information & help thread

fatbelly

Farkinpeeps wrote: »

Hi, I currently have a DRO, I was just wondering at the end of the 12 months will the insolvency service ask for copies of my payslips? Also a family member has passed away and left me around 2k which is to be paid to me my cheque, will this effect my DRO as this will show on my bank account

Hi

No, they won't do an income check at the end. They rely on you to inform them of any changes, such as a lump sum windfall..

Here's the guidance

 Inform the Official Receiver of any property or increases in income that they receive whilst subject to the DRO moratorium period. For example lump sum (cash) payments, PPI refunds, tax rebates, other windfalls, property and money left in a will

The legislation imposes this obligation in order to detect when an individual no longer meets the parameters for a DRO, i.e. their disposable income exceeds the existing parameter (currently £50 per month) or they receive property with a value in excess of the existing parameter (currently £1,000).
Whilst debtors are clearly required to comply with the legislation, they should not overly worry about small increases in income affecting their eligibility. Provided the increase in benefits or income does not permanently increase their income such that the parameter is breached, no further action will be taken by the Official Receiver.

The decision to revoke is discretionary and where the value of the property acquired is modest, the Official Receiver will not revoke for all cases where the debtor is open and honest and the value of the asset in question is less than £700, provided that the total sum involved does not exceed 50% of the debtor’s total liabilities.

Where the value of the property, including lump sum payments, is between £1,000 and £1,850, each case will be assessed on its own merits taking into consideration numerous factors, including but not limited to liabilities, health, personal circumstances, age, etc. and a decision will be made on an individual basis as to whether it would be appropriate to revoke or not.

Where the value of the property, including lump sum payments, is in excess of £1,850, it is more likely that a DRO may be revoked, although any mitigating factors would be included in our determination.

You are likely to lose your DRO with a 2k lump sum and you may need £680 of this for bankruptcy if the 2k is not enough to clear your debts.

Your case seems like this one

https://forums.moneysavingexpert.com/discussion/5482150

How much do you owe, and to who?

Farkinpeeps

Hi, I currently have a DRO, I was just wondering at the end of the 12 months will the insolvency service ask for copies of my payslips? Also a family member has passed away and left me around 2k which is to be paid to me my cheque, will this effect my DRO as this will show on my bank account

Farkinpeeps

Thanks for your help,I have 13K of debt, my debt is mostly unsecured loans, if I was to pay the 2K cheque into my bank and withdraw it at the soonest possible time, would I not be able to get away with not declaring it?

Flyright

Not declaring an asset is breaking the law and nobody on this forum is going to encourage you to do that. The OR will find out about it so you need to disclose it.

Pinkwhisk

Hi, myself and my partner are currently applying for DRO with national debtline. I know the budget needs to be under £50, which ours is. Will they ask where our surplus is going? We would like to book a break away (uk caravan holiday) but the payments out of my account each month would show if they asked to see bank statements. Would the OR be ok with this? Thank you

fatbelly

Pinkwhisk wrote: »

Hi, myself and my partner are currently applying for DRO with national debtline. I know the budget needs to be under £50, which ours is. Will they ask where our surplus is going? We would like to book a break away (uk caravan holiday) but the payments out of my account each month would show if they asked to see bank statements. Would the OR be ok with this? Thank you

No, they won't ask, and it isn't routine for them to want to see bank statements.

The Sun £9.50 holidays are brilliant value and you don't even need to buy their rubbish newspaper - there's always a thread like this on the go, giving you the codewords:

https://forums.moneysavingexpert.com/discussion/5516159

It's really not a problem

Pinkwhisk

Thank you Fatbelly :-)

fatbelly

As it sounds like the overdraft will be going, you do need to open a new account unconnected to your debts.

You also need to sort out whose debt is the benefit overpayment*

The worst case is that it's joint, in which case

your liability = 15000 + 500 +2800
his = 19300 + 500+ 2800

in which case he would need bankruptcy

Why don't you go first, and if that sorts the HB o/p, he goes next? Otherwise, he goes bankrupt.

* Checked the rules on this, and it seems the overpayment is recoverable from:

• claimant
• claimant’s partner, if they were members of the same household, both at the time of the overpayment and when it is being recovered

Another question - is the overdraft at it's maximum now?

fatbelly

Hi

The report the DRO team use is Experian, so a £2 statutory report from them is worth getting. Don't subscribe to any service that charges as it's not easy to unsubscribe.

Ideally you want reference numbers for the debts but if there are one or two without, that shouldn't stop your intermediary from submitting the application.

I think the HB situation is as I added to my last post - see what stepchange or national debtline say. The account will be in your name but the partner can be pursued for it, if they were members of the same household, both at the time of the overpayment and when it is being recovered. And I think that makes it a 'liability' as far as his involvency is concerned.

I was asking about the overdraft in case there was £680 space there for his bankruptcy fee.

fatbelly

My final post for the day, I think.

National Debtline have some very good factsheets, including ones on DROs and bankruptcy. For someone in rented accommodation with <£20 per month surplus income and no assets, who is only going bankrupt because their debts exceed the DRO threshold, there would not be much difference between the two.

Ironically, if you have debts that you know are 'out there' but you have no details, then bankruptcy would suit you as all the debts would automatically be covered whereas in a DRO it is only those that are listed. That would be an advantage of bankruptcy over a DRO.

Disadvantages would be that a car worth <£1000 is not automatically protected, increased risk of your bank account being frozen, only £20 per month surplus being excluded so more chance of a 3-year income payments agreement/order, higher fees.

Could things that do not appear on your credit report be more than six years since they defaulted? They would have dropped off. If you haven't paid or acknowledged the debt for 6 years they are statute barred and (preferably this should be evidenced) don't need to be listed on a DRO.

Some other debts are 'excluded' and so don't count towards the 20k debt limit - I wonder if you are counting any of these - social fund loans, magistrate court fines, student loans, child support arrears, tv licence arrears.