Debt Relief Orders (DRO) - Information & help thread

fatbelly

Suzie1981 wrote: »

Hi everyone it's me again! So stepchange have all the papers that was requested I recieved an email today letting me know that they were splitting my budget 50/50 between me and my partner as it's my dro not his! So the cogs are turning at the moment. My question is,stepchange sent out letters to my debts stating my dmp is now finished. So I'm getting calls left,right and centre about what's happening! Do i still make a token payment towards my debts or not? Also whats classed as favouring 1 debt over another?

Token payments wouldn't be seen as a preference but there is little point in paying anyone anything when you are going to have a DRO any day now.

Just block the calls if you can and ignore the letters.

Suzie1981

Cheers once again I thought that!! Just wanted to double check! Hopefully I will know the outcome in a couple weeks fingers crossed.

sourcrates

Suzie1981 wrote: »

Cheers once again I thought that!! Just wanted to double check! Hopefully I will know the outcome in a couple weeks fingers crossed.

You usually find out within a few days as the insolvency service promises to deal with your application within 48 hours of receiving it.

Good luck!!

skywatcher44

My DRO with stepchange took 13 Days once my papers were submitted before I received My Barcode letter. I phoned to check they had received my papers after a week and had a telephone interview.
They asked about assets, required car registration ( They did a computer check on car ) and a few other Basic questions about the application.. Good Luck.

parkrunner

Previous post from OP, heavy debts are draining their income it appears

http://forums.moneysavingexpert.com/showpost.php?p=71245110&postcount=4380

Hello!
Am after some basic advice if that's ok-
My husband and I have been looking at bankruptcy/DRO.

He has £19300 ish in his name

We have a housing benefit overpayment of £2800 ish - in my name I guess but his is also on the paperwork as we share the house

£500 joint overdraft


Then I have about £15k of debts in my name alone.

Do you think we will be able to do a DRO each? The limit is £20k isn't it? If my husband did the DRO first, his part of the joint debts would be passed to me and then I could do a DRO or because they already exist would they push him over the £20k limit? I don't really know whose the housing benefit counts as. I'm the named person - could I argue it's mine? I think he could list the overdraft and still fit under?

Any ideas or thoughts? Am going to talk it all through with step change asap. Just trying to check exact amounts and credit reports in case I've missed something somewhere. And getting the kids back to school first.

Also - whatever happens - are we best opening a basic account and getting things moved to that asap? Can the nationwide flex basic be joint does anyone know?

Lukee193

Hello ive never been a situation like this before I'm 21 live in a council rented property and I'm in £1600 arrears while my rent is still £375 a month. Ive recently lost my job which I was previously on the sick for 3 months where I got no pay atall leaving me to fall in such arrears. My landlord was on the brink of sending me to court where as i wouldn't stand a chance and would be turfed out on the streets as I have no dependencies atall. I also have no immediate family I could live as where I'd be homeless. Ive spoken to money advice and they think the best thing for me is a DRO (debt relief order) if I'm eligible. This is where I'm worried as I got a final payment from my previous employer at the end of October. I havent told anyone this but ive paid a lot of personal debts of with it and that's what's been keeping me going with food and electric and everything else. What will happen if they see my statements and see a payment from my previous employer only last week and its all gone. Bare in mind that's the only money thats gone into my account in the past 3 months. I'm currently waiting on receiving my credit report I'm just really worried as to where I stand with my housing and would like abit of help if anyone could please I'd be so grateful

fatbelly

Lukee, your priorities are

Having somewhere to live
Having some income

So the immediate thing you have to do is make sure you are getting the benefits you are entitled to - JSA or Universal credit depending where you live, housing benefit and council tax support.

If you're not well enough to work, its ESA. If you are well enough, then getting some work is your next priority.

Your most important debt is the rent arrears and putting those into a DRO will not stop you from being evicted, so you need to get into a stable position where your rent is being paid either by you or by benefits, with something being paid to the arrears.

If you go to court with rent arrears you are not 'turfed out on to the streets'. Courts will try to keep you where you are by giving a suspended possession order, where your rent must be paid (by benefits is OK) together with something to the arrears. This could be as little as a further £3.70 per week deduction from your benefits.

When everything is stable that is the time to consider a DRO. As you say, if you are eligible. If you leap into one now, then find work that takes you over the £50 per month surplus limit, then you lose the DRO, the debts come back and you could not have another one for 6 years.

If you post on the debt free wannabee board you will get lots of help.

Peekaboo1

Can I ask you a quick question I have been struggling with debt my debts are around 12k, I was a silly girl and then got.in to the situation I was taking loans out to pay others... I have started the dro process and fit the criteria for it, im on benefits I am my nanas carer and have two children and single...
My concern is a few payday loans were taken out a few weeks before I started the dro process... it was to pay others as im scares of bailiffs coming.... will this cause a rejection in my dro

fatbelly

I'll give you a quick answer - probably not because you took out payday loans.

The key to what you said is that you took them out before you started the dro process.

It's a little more concerning that you chose to pay off some debts ahead of others a short time before going for a DRO

However, if there was a logical reason, e.g you paid off an aggressive bailiff on a debt that already had a court order then that would be understandable.

This is what the dro toolkit says about preferences:

A preference is where a client does something or allows something to be done, which will put a creditor or a guarantor for a debt in a better position following the making of a DRO, than they would otherwise have been in. For example, if your client pays off one creditor but not the others, the client has given that creditor a preference. The debt in question must be a qualifying debt. Payments towards both non priority and priority debts such as council tax, rent arrears and utilities can technically be preferences. However, the DRO Team has said that payments to priority creditors will not be treated as preferential payments

If a third party, such as a relative or friend, uses their own money to pay off one of the creditors for your client, but not the others, the DRO Team has said that it does not consider this to be a preference.

and

If a preference has taken place within the past two years, the DRO Team has the discretion to refuse to make a DRO. The DRO Team will look at the individual facts surrounding each case before making the decision and will consider factors such as:-
•what was the effect of the preference on the other creditors? For example, how much money was involved, compared to the total amount of debt
•when within the two year period did the preference take place? For example, was it made after the client received advice about a DRO
•who was the preference given to? For example, was it a friend or relative or was it a commercial creditor
•why did it happen? For example was the client pressurised into making the preference.

sourcrates

Peekaboo1 wrote: »

My concern is a few payday loans were taken out a few weeks before I started the dro process... it was to pay others as im scares of bailiffs coming.... will this cause a rejection in my dro

It's extremely unlikely for a bailif to be involved with consumer credit act debts, I think you panicked a bit there, which is understandable when you are unsure of what may happen.

I'm sure everything will work out fine for you.