Debt Relief Orders (DRO) - Information & help thread

Dro_123

Hi all I have had my appoitment with cab where I gave all my info of all my debts and signed a form to say I want to apply an accept a dro.

Question now is I haven't paid the 90 quid fee yet so also haven't been told if I'm accepted for dro yet but I would like t to ask anyone received any benefit backdate at this stage an then been refused a dro even though you was clearly owed that benefit but had previously been underpayed in previous payments along the line.. just I have been told today that ther is now a possibility that my dro will be declined? Anyone know any info on this or been In this situation an been rejected or accepted?

Dro_123

Hi would you min reading my info underneath plz an let me kno where I stand with that if posSible plz thanks

fatbelly

Dro_123 wrote: »

Hi all I have had my appoitment with cab where I gave all my info of all my debts and signed a form to say I want to apply an accept a dro.

Question now is I haven't paid the 90 quid fee yet so also haven't been told if I'm accepted for dro yet but I would like t to ask anyone received any benefit backdate at this stage an then been refused a dro even though you was clearly owed that benefit but had previously been underpayed in previous payments along the line.. just I have been told today that ther is now a possibility that my dro will be declined? Anyone know any info on this or been In this situation an been rejected or accepted?

Hi. Yes there was a time when the guidance had two different ways of treating backdated benefits but it now says:

Lump sums paid in respect of benefits
Lump sums received in relation to the following items should not be entered as assets but should be declared in the additional information box on the submission page:

• Constant Attendance Allowance under the Industrial Injuries Benefit
• War Pensions Schemes
• War Pensioners Mobility Supplement under the War Pensions Scheme
• Armed Forces Independence Payment

All other lump sum awards that have been paid, awarded or claimed should be disclosed as assets.

If you think you're due a lump sum, why not wait till it hits, and, if more than £1000 wait till your spending brings it below that figure before doing your DRO

Dro_123

Sorry not to sure what you mean by where you said if due a lump sum to wait till spending brings it below that amount? Also i no longer have the funds due to owing money to friends etc how can it be an assett when don't have it available?

fatbelly

You said

I would like t to ask anyone received any benefit backdate at this stage an then been refused a dro even though you was clearly owed that benefit but had previously been underpayed in previous payments along the line..

I assumed the backdated benefit was coming as a lump sum and that you had not yet received it.

If you are saying that you already received it and have paid it to your friends then your intermediary may be concerned that you have treated them 'in preference' to other people and organisations you owe money to.

If your benefit income is now steady, and you are not sitting on capital of over £1000, just give it a couple of months before making the application, then list all the debts you have at that point.

Are DRO applications ever turned down because of preferential treatment? Hardly ever. It's possible but I've never seen it.

blotter12

Hi,I am waiting on an inheritance from an uncle who died 3 years ago, it’s unsure whether it will be finalised within the next year
I believe I could qualify for a DRO , my question is , would this be a better option than a token payment plan, or bankruptcy
My financial situation regarding income is unlikely to improve in the next year other than the possibility of the inheritance being paid

fatbelly

blotter12 wrote: »

Hi,I am waiting on an inheritance from an uncle who died 3 years ago, it’s unsure whether it will be finalised within the next year
I believe I could qualify for a DRO , my question is , would this be a better option than a token payment plan, or bankruptcy
My financial situation regarding income is unlikely to improve in the next year other than the possibility of the inheritance being paid

It's dodgy.

If the inheritance can be quantified, it counts as an asset. Your DRO could be revoked.

I'm assuming this will be over £1000.

How is it likely to compare with the value of your debts?

blotter12

I would say it would definitely cover the cost of the debts, I am not concerned about paying the debts if I recieve the inheritance but would like to know which of the three options (TPP, DRO , or bankruptcy)would be the least expensive as I believe annulment of bankruptcy costs are high.
In other words would a DRO or a TPP be a better option
I

fatbelly

blotter12 wrote: »

I would say it would definitely cover the cost of the debts, I am not concerned about paying the debts if I recieve the inheritance but would like to know which of the three options (TPP, DRO , or bankruptcy)would be the least expensive as I believe annulment of bankruptcy costs are high.
In other words would a DRO or a TPP be a better option
I

I see. Definitely avoid bankruptcy.

I think I would also avoid a DRO, though I did have a client who was expecting a lump sum and insisted on doing one (we're not allowed to refuse) as he just wanted relief. I think he had aggressive Council Tax Bailiffs but was awaiting a lump sum, which duly arrived six months into the DRO and it was then revoked and he paid his debts. He was elderly himself, I think in social housing, and had no worries about his credit history

If you could use a better credit history, then it would be better to let the defaults run for 6 years - you're probably somewhere along that path - pay token offers for now and use the lump sum inheritance to pay off the debts by full & final settlement and hopefully have some funds left over.

blotter12

Thanks for reply fatbelly
I am 64 years old myself and have never missed a payment, not worried about a future credit history. If the inheritance were to come through after the moratorium are the rules the same as bankruptcy ie the debts would still need to be paid ?
Also if the interest on the debts are frozen during the moratorium, and then I am able to pay the debts through the inheritance coming through is all the missed interest added on from the start of the DRO