Debt Relief Orders (DRO) - Information & help thread

missmilkwood

Hi there,

Just a few questions, I have been reading through the posts. I have oevr 17k worth of debt between 3 creditors, does this mean I cannot qualify for a DRO? I wilk not be able to get the debt down to 15k, and have recently stopped making payments. I've read a thread by another person owing 67k and was recommened DRO, hense my confusion.

elfieb

missmilkwood wrote: »

Hi there,

Just a few questions, I have been reading through the posts. I have oevr 17k worth of debt between 3 creditors, does this mean I cannot qualify for a DRO? I wilk not be able to get the debt down to 15k, and have recently stopped making payments. I've read a thread by another person owing 67k and was recommened DRO, hense my confusion.

You can only apply for a DRO if you debts are under the 15k threshold.

The thread you saw regarding 67k of debts and a DRO is highly inacurate!!

sparkswillfly_2

what happens if your debt dramatically increases whilst your in an 8 week queue for a DRO? my bank are currently adding £75 a month to my overdraft even though I sent letters asking them to stop adding charges! This was all over a 12.99 direct debit that I forgot to cancel and repaid after a week.

immoral_angeluk

Are your debts near 15k? It's the balances at the time of the DRO application that are taken into account.

elfieb

sparkswillfly wrote: »

what happens if your debt dramatically increases whilst your in an 8 week queue for a DRO? my bank are currently adding £75 a month to my overdraft even though I sent letters asking them to stop adding charges! This was all over a 12.99 direct debit that I forgot to cancel and repaid after a week.

I believe the OR can use their discretion if they believe charges have been added unfairly to tip you over the 15k limit.

sparkswillfly_2

No they are only about £6000 I just worry that because the charges arent included in the statements that I gave CCCS Im going to have to pay them<br>

immoral_angeluk

sparkswillfly wrote: »

No they are only about £6000 I just worry that because the charges arent included in the statements that I gave CCCS Im going to have to pay them<br>

I wouldn't worry. There's no way in 8 weeks that you'll rack up 11k worth of charges..

immoral_angeluk

It is included yes, although not a debt written off by the DRO.

fatbelly

Hi IA

Student Loans must be listed, as must all debts. However they are marked as an 'excluded debt' and as such do not count toward the £15k liability limit.

I checked this - it's on p 38 of the guidance notes.

pugsley29

I just found this when googling, hope they make a sensible decision


WRITTEN MINISTERIAL STATEMENT
IAN LUCAS, MINISTER FOR BUSINESS AND REGULATORY REFORM, DEPARTMENT FOR BUSINESS, INNOVATION AND SKILLS
23 MARCH 2010
DEBT RELIEF ORDERS AND PENSIONS

We are today launching a consultation about personal insolvency. Specifically, we are asking whether we should amend the eligibility criteria relating to Debt Relief Orders (DROs) in order to allow access to those people who are currently excluded because they have pension rights based on a small current pension valuation that they cannot draw down for some years.

DROs were introduced in April 2009 following research that identified that there were people in long term debt difficulties who had nothing to offer their creditors and who could not afford to make themselves bankrupt. Delivered in partnership with the professional debt advice sector, DROs provide low cost easy access to debt relief for those overwhelmed by relatively low levels of unmanageable debt. They are designed to provide a fresh start for the most vulnerable people trapped in debt.

There are strict eligibility criteria of assets less than £300, debts no more than £15,000 and surplus income of less than £50 per month. But because a pension is treated as an asset, some people who would otherwise qualify find themselves unable to apply for a DRO because they have pension rights based on a pension that has a low current valuation. This consultation examines a number of options designed to make the system fairer for these people. In particular, we propose asking whether a pension should not count towards the value of assets provided that the current valuation is no more than either £1,000 or £5,000 or £10,000; and/or where the individual cannot draw down the pension for at least 5 years or 10 years. We also intend to ask whether there should be an additional requirement that the pension scheme must be one that is approved by HMRC.

I am placing copies of the consultation paper in the Libraries of the House.

We intend to actively engage with stakeholders throughout the consultation and welcome views on whether the proposals will deliver a workable solution that provides greater access to vulnerable debtors. The consultation will close on 23 June 2010.

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