I need help: DRO

LyndseyBee

Hello All!

I am very new to this forum but was reccomended that I get some advice by my Mom.

I am a recent graduate who had been unemployed for over a year now, I have struggled to find work and pay off over-draft/loan/credit card.

My debt is now at £5000 which is hard to pay off when my income it limited to £40 a week.

My loan repayments and overdraft was handed over to a debt collection agency and I am scared they will take my parents things if they feel like it. No matter how much I tell them of my situation they do not listen and are making my life a living hell! No one seems to want to help or listen!

I have done a bit of research with regards to the new DRO and want to know how to get the ball rolling.

How long does it take for the DRO is come into effect, and what do I do in the mean time? should I call them and inform them of the DRO? or will they be informed upon my application?

Thank you! x

debtinfo

Hi, Have you sought any independant advice, Im sure it doesent seem so to you but £5,000 is quite a small amount of debt, Although you have been out of work for some time as a graduate when you do find work you may be able to pay this off within a few years. A DRO is a formal type of insolvency like an IVA and Bankruptcy and will stay on your credit file 6 years. Additionally if anyone asks you about a DRO at any time in the future you will gave to tell them, this could affect getting things like a mortgage many years down the line. Creditors cannot take any of your parents property as it is theirs not yours. I would reccomend speaking to someone like the CAB, National debtline or CCCS all of which are in the stickys

jamesb1239

Hi & Welcome

A DRO can only be applied for by a registered intermediary(sp) such as CAB and CCCS. They will go through your options and if a DRO does seem to be the most appropriate solution then they will start the ball rolling on that. They may suggest token payments to your creditors such as £1 per month, and assist you in trying to sort this out.
If you genuinely want a DRO then they will take this route with you. The fee for a DRO is £90 and is non refundable under any circumstances ie you get refused or change your mind. You can only have <£50 surplus income per month and <£15000 debt.
They fill in an application with the details of all of your income and expenditure and also your debts. This is then sent off and within a few days you will receive a letter from the Insolvency service to say that it has been approved and your creditors must cease all collection activity from that date.
If after 12 months your income does not exceed the £50 per month surplus limit then the debts will be discharged and you will no longer be liable to pay them. If your income does increase above the threshold then your DRO will be revoked and the creditors may commence collection activity against you.

Debt collectors can only enter your home (I assume that you live with your parents) if they have a court order and have appointed bailiffs. They cannot take anything that doesnt belong to you and they can only enter if you let them in

The timings for a DRO vary and it depends on how quick you can get to see an adviser. With mine and OH's we went to CAB for a general appointment and then managed to get a debt appointment about 3 weeks after that on the Monday. We then filled the DRO form in (talked CAB into letting us complete it ourselves as our CAB usually complete it for you but that takes time) that night and went back to CAB on the Tuesday submitted the form and paid the £90. Then my name appeared on the Insolvency register on the Thursday

With a debt of £5000 i do think that you have a few other options open to you such as token payments. Also make sure that all of your creditors have frozen or reduced the interest,

Good luck and hope that helps.

Feelingfoolish_3

Hi there
Just a thought for you, CAB, CCCS, National Debtline are great but hard to get through to sometimes or have a large waiting list, with you being on a low income if you ring Community Legal Advice 0845 345 4 345 from 9 tomorrow you will get straight through to a debt adviser who can discuss your options, including a DRO with you.

hounslow_boy

LyndseyBee wrote: »

Hello All!

I am very new to this forum but was reccomended that I get some advice by my Mom.

I am a recent graduate who had been unemployed for over a year now, I have struggled to find work and pay off over-draft/loan/credit card.

My debt is now at £5000 which is hard to pay off when my income it limited to £40 a week.

My loan repayments and overdraft was handed over to a debt collection agency and I am scared they will take my parents things if they feel like it. No matter how much I tell them of my situation they do not listen and are making my life a living hell! No one seems to want to help or listen!

I have done a bit of research with regards to the new DRO and want to know how to get the ball rolling.

How long does it take for the DRO is come into effect, and what do I do in the mean time? should I call them and inform them of the DRO? or will they be informed upon my application?

Thank you! x

Hi and welcome to the forum. I was in a similar position to you in the past, luckily I came across this site and read a lot of the threads in this and the loans section. I've learned an awful lot about my rights and what debt collectors can and can't do, also some of the many scare tactics they will employ to try and get as much cash out of you as possible.

Banks sell bad loans on to debt collection agencies typically for pennies on the pound, there are tax advantages for the bank and their balance sheet looks instantly healthier. The agency, having bought your loan from the bank for a fraction of its worth will then try and extract as much of the original outstanding amount as possible from you plus interest and other charges. It's big business and it's booming in the UK.

They'll call you at all times of the day, if you have a job will try and call you at work to embarrass you, threaten you with bankruptcy etc etc.

In actual fact as a renter/living with parents and no tangible assets to your name there's not a lot they can do, but they rely on the fact that you don't know this and that you can't handle the pressure they will put you under.

So handle it

I'm not advocating that you default on your loan, but the plain fact is that without any tangible assets to your name (no house, expensive car etc) there's really not a lot a bank or debt collection agency can take away from you if you can't or won't pay.