Debt Relief Order and Rent Arrears

mighty_reds

Hi All

I have looked at some of the stickies but maybe did it in too much of a rush so forgive me if this is a very common question you have to answer all the time.

Am asking for someone. Person concerned is considering a Debt Relief Order. She is a tenant of a Social Landlord (Housing Association) and has rent arrears that are quite large (over £3000 I think)

However she an arangement to pay these and is sticking to it. The Debt Relief Order would mostly be in relation to credit card debt, utility bill debt and C-Tax debt.

Question being, if she went down the Debt Relief Order route would that automatically clear the rent arrears and then put her tenancy in danger? She's actually happy to continue to try and pay off the arrears but it's the other debts she cannot manage long term.

Client is currently on JSA pending an ESA claim and very limited income.

Thank you

dojoman

Has she spoken to one of the debt charities yet?

mighty_reds

dojoman wrote: »

Has she spoken to one of the debt charities yet?

Yes, CAB but I don't know the outcome the lady is highly stressed obviously we'll try that route but wanted some feedback from peeps on here as a heads-up kind of thing

tigerfeet2006

In BR the OR will allow the repayment of housing debts if you are at risk of losing your house. I have also seen HA debts go into BR and the tenant has been able to stay put, Council and HA housing is for those who need it and it is highly unlikely that she will be evicted.

I am not so sure with DRO's as I don't know alot about them but can't see them being much different.

It might be worth giving National Debtline a ring and posing the question to them.

fatbelly

mighty_reds wrote: »

However she an arangement to pay these and is sticking to it. The Debt Relief Order would mostly be in relation to credit card debt, utility bill debt and C-Tax debt.

Question being, if she went down the Debt Relief Order route would that automatically clear the rent arrears and then put her tenancy in danger? She's actually happy to continue to try and pay off the arrears but it's the other debts she cannot manage long term.

A DRO works quite well in these circumstances. The debtor is allowed to make payments to rent arrears to maintain the tenancy and providing there is evidence of an arrangement these payments can be included as essential expenditure.

Rent arrears being paid under an Suspended Possession Order should be an allowable expense. Where a debtor is voluntarily paying rent arrears under the threat of a possession order then the position is more unclear but, provided there is evidence of an agreement to repay the arrears by instalments, this would ordinarily be an allowable expense.

mighty_reds

fatbelly wrote: »

A DRO works quite well in these circumstances. The debtor is allowed to make payments to rent arrears to maintain the tenancy and providing there is evidence of an arrangement these payments can be included as essential expenditure.

Thank you that's interesting. I will help her clarify this with either National Debtline or CCCS

fatbelly

mighty_reds wrote: »

Thank you that's interesting. I will help her clarify this with either National Debtline or CCCS

That quote was from the official 'Intermediary Guidance Notes', latest version

immoral_angeluk

You are at risk of repossesion if you don't continue to pay the arrears owed to a landlord, so it's allowable in a DRO to make payments toward the arrears even though the debt itself is a qualifying debt. She has to keep up the payments though otherwise they'll go for eviction.