Considering a DRO, am dying to hear your oppinions, experiences, highs and lows...

Options
I have just been doing some reading and I think a DRO sounds very interesting.

I currently have £5300 outstanding debt which I am restricting myself as heavily as possible to try to pay. To be very frank I have times when I am utterly sick of it. All of my debt falls into qualifying categories except £270 I owe my sister.

At the moment my SOA would show about £90 a month available for debt repayments. That though is when I am really trying. My income is from benefits and so I officially don't have any spare cash and if I stopped restricting myself I can't see how I would have £50 a month.

My car is insured for £1000, was bought for £500 (receipt kept) and I would say had a true private-sale value of £650 now that I have scratched it all over (crap at parking).

I am due to have a child in 6 weeks time. I'm thinking if I do go for a DRO I probably ought to move sooner rather than later, before the SOA all changes again for the baby and I have to try to think while sleep deprived and try to account for the little one too.

So, I've read the official talk on what it does, what the rules are and so on and I will be doing a bit more reading round yet. What I want you guys to tell me in real, honest terms are things like...

Are they any good?
You have to pay for a year, it stays on your records for 6. Does it look as bad as BR? How does it compare to how my file currently looks (peppered with defaults)?
Have you had a DRO, if so what was that like?
On a human level, would you recommend a DRO to a friend?
Is there something the official details wont tell me that I should probably know?

Tell me about DRO's, tell me the things the insolvency service and the debt charities wont.
I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
(Ok, one of them is powerless, spiders can be nasty.)


As of the last count I have cleared
[STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
«13

Comments

  • fatbelly
    fatbelly Posts: 20,672 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Options
    Hi Hannah

    There are a few of us around here who are Approved Intermediaries and a few who have gone down the DRO route. I would say that it's a brilliant tool for those who need it.

    There are two of the basic criteria I should make some comments on: 1. The limit £50 per month surplus income is calculated by the AI on a Common Financial Statement and I'm guessing that your £90 surplus is achieved using some extreme moneysaving, so it shouldn't be difficult to show that you are within that limit. At the moment.

    The £1000 limit on car value is done using Parkers Guide. However, they charge to value cars pre-2000 (which I'm guessing yours is) so you can do your own valuation but it's helpful to have some evidence. I use Wisebuyers. If you want to pm me your registration number, I'll tell you what figure I would put.

    You are well within the 15k debt limit. If you are about to have your first child, you may find that your benefit income goes up a lot. A debt management plan is still another option for you.

    Finally, you dont pay for a year. You pay the £90 fee up front at the start, and then you are forbidden to make payments to your creditors (except rent arrears). The morotorium period should end at one year with debts deemed void.
  • Trollfever
    Options
    Are they any good?

    Excellent for folks with a low income and no assets.
  • dojoman
    dojoman Posts: 12,027 Forumite
    Options
    Try posting on the DRO thread, you may get more answers there.
    :pB&SC No. 298
    Life`s Tragedy is that we get OLD too soon
    and WISE too late!
  • Hannah_10
    Hannah_10 Posts: 1,774 Forumite
    Options
    Thank you Fatbelly that was really useful information.

    I tried wisebuyers. The highest valuation given after milage adjustment was for "retail" at £575, the lowest was for "private poor" which was £-95! The wisebuyers valuation for "private good" was a mere £345. I've got good connections in the motor trade so I'll ask a tame car dealer to give me the Parkers book valuation tomorrow, verbally only for now.

    I'd totally misunderstood about the £50 a month thing, I thought the OR would want me to hand that over for a year thanks for clearing that up.

    I do have rent arrears, which currently stand at £605. I pay this at a rate of £10 per fortnight by agreement (£260 a year). If I did a DRO in the near future there would be over £300 rent arrears outstanding after one year. I am assuming that £300+ is then written off too?

    After the baby, my benefit will indeed go up, I have CAB-generated figures somewhere showing how much by, but again as benefits are calculated on the basis of official need I am thinking my SOA is still unlikely to show suplus? What if it turned out I had more than £50 a month spare at that point? Would I be in trouble?

    Last question, sorry to keep bothering you, can I have a look at a Common Financial Statement? Is there one online anwhere I could see? I'm curious to see what is and isn't on it. Well, actually curious is probably the wrong word, nervous is probably more accurate.
    I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
    (Ok, one of them is powerless, spiders can be nasty.)


    As of the last count I have cleared
    [STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
  • fatbelly
    fatbelly Posts: 20,672 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Options
    Hannah_10 wrote: »
    I tried wisebuyers. The highest valuation given after milage adjustment was for "retail" at £575, the lowest was for "private poor" which was £-95! The wisebuyers valuation for "private good" was a mere £345. I've got good connections in the motor trade so I'll ask a tame car dealer to give me the Parkers book valuation tomorrow, verbally only for now..

    You're OK to use £345. It's clearly an under-£1000 car
    Hannah_10 wrote: »
    I do have rent arrears, which currently stand at £605. I pay this at a rate of £10 per fortnight by agreement (£260 a year). If I did a DRO in the near future there would be over £300 rent arrears outstanding after one year. I am assuming that £300+ is then written off too?.

    Not quite. If the landlord evicted you, he could not take court action against you for the arrears but you are allowed to make payments to retain security in the property where there is a suspended possession order or evidence of an arrangement. Put £10 per fortnight on your expenditure (plus any top-up to Housing Benefit there might be).
    Hannah_10 wrote: »
    After the baby, my benefit will indeed go up, I have CAB-generated figures somewhere showing how much by, but again as benefits are calculated on the basis of official need I am thinking my SOA is still unlikely to show suplus? What if it turned out I had more than £50 a month spare at that point? Would I be in trouble?.

    Possibly. I think you're unlikely to get this submitted before the baby arrives so work on post-baby income/expenditure
    Hannah_10 wrote: »
    Last question, sorry to keep bothering you, can I have a look at a Common Financial Statement? Is there one online anwhere I could see? I'm curious to see what is and isn't on it. Well, actually curious is probably the wrong word, nervous is probably more accurate.

    I don't know anywhere I can link you to. Maybe someone else will.
  • x__Indigo_x
    x__Indigo_x Posts: 1,099 Forumite
    edited 14 September 2010 at 11:40AM
    Options
    google common financial statement and you should come across the one advice agencys use. or try citizens advice http://www.adviceguide.org.uk/

    if i was you id advise you to go into a cab they will advise you on all options available . They will produce a financial statement and help you fill in the DRO APPLICATION.

    looking at what you have said i believe you would be suitable for a dro before or after the baby. as after although your income increases so do your outgoings . also there are certain trigger figures which advice agencys and debt companys use for example a single parent should not spend more than 270-290 ish per month on food and housekeeping. there are figures for travel , phone , housekeeping and other. and figures for adult child and young adult. i have yet to see someone on income support and child ben./ tax credits to have over 50 a month disposable.

    edit.you dont say whether you live alone? or is there a partner in the household.?

    any questions pm me as i work in this sector :) x
    I am a full time Benefit and Money Adviser for a leading non profit charity and I LOVE my job <3
    Comments posted on this forum do not reflect the views of my employer :)

    Please note forum police I suffer from dyslexia so my spelling and grammar can be dreadful- sorry but I cant help it!
  • Hannah_10
    Hannah_10 Posts: 1,774 Forumite
    Options
    Fat Belly and Indigo thank you again.

    I live alone. I have a steady boyfriend (who is the father of the baby) but we don't live together and we never will. (It was tried in March, he'd created almost £1,000 of council tax and rent arrears in my name by May, so that will not be happening ever again!)

    I cleared the Council Tax arrears from the backdated benefits (the BA took thier time processing my reclaim), I then put a lump sum to the rent arrears. My landlord is a housing association, represented by the local estate manager so I was able to come to an agreement for repaying the rest. Proving that there is an arrangement to repay is not likely to be difficult, I already have it in writing.

    So, checking I haven't got this wrong, the rent arrears aren't really included in the DRO? I still have to pay them all off myself? (Not that I mind paying them off, I just want to know).

    Also, I owe my sister £270. I wasn't wanting to put it in the DRO as I feel it's a matter of honor. She did not have it to lend at the time I borrowed it and she'd actually gone into debt on her credit card to help me out as it was an emergency. So DRO or not, I will be repaying her every last penny. The OR will have to be told about it as I repay my sister by making online bank transfers (clearly visible on the account). Will he/she be alright about me continuing to give my sister money? She is also on £10 a fortnight. She would take any rate I was prepared to offer though.

    I contacted the CAB a couple of days ago, I see a certain advisor there who is on holiday at the minute, but I will be given an appointment as soon as she is free again. It can take some time to get to see her. In the mean time I am very grateful to you all for answering my questions. :)
    I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
    (Ok, one of them is powerless, spiders can be nasty.)


    As of the last count I have cleared
    [STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
  • Hannah_10
    Hannah_10 Posts: 1,774 Forumite
    Options
    With a heavy heart I am re-opening this thread. I'm not really loving the idea of a DRO because the idealist in me thinks I should pay everything I fairly owe back but I'm not really getting anywhere and I feel cornered.

    I started keeping a DFW diary in June when I believed I owed £5550. 8 months later I have paid lots but I have discovered even more debt. As of right now I still owe £5245, just £305 less in spite of having worked hard to clear £1520. The debt's flippin risen so much it's eaten over 80% of my hard work.

    Rounded to whole pounds I owe...

    Being Paid Off...
    My Sister £450* Now £250*
    Rent arrears £779 Now £604 or less (needs update)
    RAC £72 Now £24
    Water arrears £791 Under arrangement but not yet paid anything.

    Not Being Paid Off...
    Old Overdraft £2268
    Gas arrears £599
    Moorcroft/Orange £540
    Barclaycard/Lowells £181 (statute barred and disputed anyway)

    I'll still have to pay my sister and it makes sense to let the RAC keep taking thier £6 a month as this is owed for services I am currently in reciept of. Rent arrears need to be payed too so that's £878 I wont be able to include in the DRO. The DRO will be for £4376.

    Can the CCCS help me with it? For personal reasons I don't want to go to the local CAB.
    I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
    (Ok, one of them is powerless, spiders can be nasty.)


    As of the last count I have cleared
    [STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
  • Hannah_10
    Hannah_10 Posts: 1,774 Forumite
    Options
    Ignore last question. I just found the answer here http://www.insolvency.gov.uk/bankruptcy/DRO/auth.htm
    I refuse to be afraid of the big bad wolf, spiders, or debt collection agencies; one of them's not real and the other two are powerless without my fear.
    (Ok, one of them is powerless, spiders can be nasty.)


    As of the last count I have cleared
    [STRIKE]23.16%[/STRIKE] 22.49% of my debt. :(
  • fatbelly
    fatbelly Posts: 20,672 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
    Options
    Hi again Hannah

    What's your question?

    A DRO still makes as much sense as it did 6 months ago.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 343.7K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.8K Work, Benefits & Business
  • 608.9K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards