Debt Relief Orders (DRO) - Information & help thread

fatbelly

It's possible. One of my other interests is oldish cars and they are not really depreciating at the moment.

A Parkers Guide print-out is acceptable evidence and a local dealer written quote would be ok.

Other than that, your choices are to wait an d se e if the value does go below 2k, or sell in the market and keep the extra in an account that hopefully doesn't take your other assets over 2k. I'd wait

tnicholas_uk

Hi There.  I'm looking for some non judgemental advice regarding my predicament.  I'm eligible for debt relief due to significant credit card debt and will likely be applying for a DRO isoon.  I always take a winter holiday overseas as I suffer from severe seasonal depression to the extent that I can't work and have very dark thoughts.  As Im on a low income I usually pay for this on credit.  If I have a holiday before applying for the DRO and pay for it on credit, is the Insolvency person going to consider this 'wreckless spending' and potentially refuse the DRO or allow it but with a DRRO?  I could pay for one from my 3.5K savings (I know you are allowed up to 2K savings with a DRO) but again could this get me in trouble that I spent savings on a holiday? I don't consider my winter holiday frivolous spending as it is so important for my mental health.  Any advice from someone with direct knowledge or experience relating to this would be great. 

fatbelly

I just responded on the other thread

Jonnybravo55

Hi, I just been sent 190 pounds in tax return. Do I need to do anything about it or can I just spend the money for day to day expenses and bills?

fatbelly

Jonnybravo55 said:

Hi, I just been sent 190 pounds in tax return. Do I need to do anything about it or can I just spend the money for day to day expenses and bills?

No problem. Do what you want with it.

Jonnybravo55

Am I allowed to join gym on a monthly subscription?

fatbelly

Jonnybravo55 said:

Am I allowed to join gym on a monthly subscription?

If you can afford it, yes.

sourcrates

@Jonnybravo55

You are free to live your life as you see fit, whilst keeping within the DRO rules, that is having a car worth no more than 2k, having assets or cash of no more than 2k, and maintaining a disposable income level of £75 or less after all your bills have been paid.

ahygyio123456

Hi everyone,

Please be kind. My debt has gotten out of control. I’m a single parent, having recently left a DV relationship (where a lot of this debt was accumulated on affording to live along with the cost of setting up a new house for myself and my child). I’m on an income low enough to claim UC top ups.

I have around £16000 of debt. I know it’s sickening and I’m really ashamed, however with the current cost of living this is only getting worse as I’m having to use credit cards to cover the negative I’m in every month due to debt payments. Im only paying the minimum payments be that’s around £600 a month due to rising interest rates etc. I’m looking in to getting a debt relief order where if you have less than £75 left a month and less than £2000 assets (I do fit this criteria) then your debt is written off after 12 months if there’s no change to your circumstances which I don’t envisage there being. I know this wrecks your credit rating for 6+ years however it’s already wrecked and not getting better anytime soon.

My concern is I have a car on hire purchase. I’ve never missed a payment on this and it is essential for my to be able to work (no public transport to my place of employment). Because of this, from what I’ve read the payment for this will be allowed as an ‘allowable expense’ on a DRO as there is a domestic need to have it. However, there is a clause in my finance agreement stating they have a right to terminate the agreement and repossess the car if you enter insolvency which a DRO is. My question is, if I continued making payments as I have done would they be informed I’d entered a DRO? How common is it for finance companies to act on this clause if you’ve never missed a payment? Does anyone have any experience of this or advice? I really couldn’t be without my car as I then couldn’t work and would really be screwed. Any advice on this or in general is appreciated.

Thank you

fatbelly

ahygyio123456 said:

Hi everyone,


My concern is I have a car on hire purchase. I’ve never missed a payment on this and it is essential for my to be able to work (no public transport to my place of employment). Because of this, from what I’ve read the payment for this will be allowed as an ‘allowable expense’ on a DRO as there is a domestic need to have it. However, there is a clause in my finance agreement stating they have a right to terminate the agreement and repossess the car if you enter insolvency which a DRO is. My question is, if I continued making payments as I have done would they be informed I’d entered a DRO? How common is it for finance companies to act on this clause if you’ve never missed a payment? Does anyone have any experience of this or advice? I really couldn’t be without my car as I then couldn’t work and would really be screwed. Any advice on this or in general is appreciated.

Thank you

The finance company is unlikely to bother as long as they continue to receive their payment.

The bigger hurdle may be in convincing your intermediary about this. I copy the guidance below, and wish you luck.

If a debtor wishes to omit the HP debt and include repayments in the expenditure, the approved intermediary will need to determine whether the payments are an allowable expense.

A payment will only be an allowable expense if the items for which payments are being made are necessary to satisfy the ‘basic domestic needs of the debtor and his family’.

Where an item on HP (other than a vehicle) is ‘disregarded property’ under Rule 9.9 Insolvency (England & Wales) Rules 2016 then payments in respect of the debt excluded from the DRO might be allowed. The approved intermediary will need to consider whether the repayments are reasonable and not being made to the detriment of other creditors.

Where the payments are in respect of a vehicle, if the debtor can demonstrate that the vehicle would be exempt for DRO purposes (for example, the value of the vehicle at the date of the application was less than £2,000 or the vehicle has been adapted for the use of the debtor as a disabled person), the repayment would be allowable.

If a debtor has a vehicle that is subject to HP with a value exceeding £2,000, payments will not be an allowable expense unless there are exceptional circumstances which would mean the repayment meets basic domestic need. If the debtor wants to argue that the expense is allowable, they would need to prepare a statement to explain in detail why they believe they should be allowed to continue making repayments. This should then be submitted via email at the point the approved intermediary submits the DRO application.
Where the value of the vehicle exceeds £2,000, there will be a number of factors to be considered in each case, for example:

• when the agreement taken out. Whether this was taken out recently and if it as a result reduced the debtor’s available disposable income.

• whether public transport is available

• whether the HP payments compare favourably to the cost of public transport

We will only make the decision on the submission of the DRO application. Debtors should be advised that if the expense is not deemed allowable, this may lead to the application being declined and they will lose their application fee.