Debt Relief Order

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Dungle_2
Dungle_2 Posts: 3 Newbie
edited 12 May 2011 at 4:45PM in IVA & DRO
Hi, i got into some debt in 2008. Well, it wasn't really debt then, i took out some unsecured loans all in my own name (not joint or anything) and had some credit cards. I then lost my job in 2008 and have struggled to get permanent work since. I was on 22k when i took the loans out, not the only jobs I seem to get are temporary and nearly always seem to be minimum wage. I've hid from the debt for a while and today decided to contact a debt management site. I found Trapped.co.uk. And they told me that they would set me up with a Debt Relief Order for £90. I'm am utterly useless with money and small prints and ts&cs etc. And i tend to just listen to what other people advise. I spoke to my mother about this, and she thinks it sounds too good to be true etc. They just want to take my money blah blah etc. Now they told me I wouldn't be able to get credit for 8 years or anything. I'm not too fussed about that. The stress this has caused me is enough to make me want a life time ban on credit. This has all amounted to a lot of pressure on me and my life the last few years. I'm undergoing therapy for my issues and they've advised I seek advice from my GP for depression. I was just wondering if there's any advice that people can give me on a DRO. My name is Dean btw :) Thanks in advance

Comments

  • Tixy
    Tixy Posts: 31,455 Forumite
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    Hi and welcome

    How much are your debts currently? How much are you earning? Did this company go through all your finances with you in detail to help you work out how much money you have surplus a month to see if you would be eligible?

    I would suggest you contact one of the charities for some free impartial advice. IMPORTANT - Where to seek professional impartial advice about your debts. It might be that they agree that your best course of action is a DRO but you need to get more than the opinion of one website before you make that decision. And one of the charities is likely to give you the best advice and explain all the implications of a DRO.

    This is worth a read http://www.adviceguide.org.uk/index/life/debt/debt_relief_orders.htm

    There is also this information thread with some useful info on DROs on the bankruptcy forum. Debt Relief Orders - Information & help
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
  • Dungle_2
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    Hi Tixy, thanks for the reply. It's around £13,000. I'm currently on job seekers allowance. Finding work is hard for the unskilled. As I said, I only ever really find minimum wage jobs. I have a young daughter, all this debt with loans and cards and old phone bills isn't good. If I was on minimum wage in 2008 I would have never taken all these loans out. Back then I was on 22k which isn't fantastic but it would have meant I could have paid off the loan comfortably. The company I spoke to did go through the debts with me. We talked about IVA's. But where my work is so inconsistent and my state of mind isn't so great at the moment I think this is why they suggested the DRO.
  • dancingfairy
    dancingfairy Posts: 9,069 Forumite
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    There's no such thing as a free ride. As Tixy said a DRO may or may not be your best option but contact one of the debt charities to ensure you are not being 'sold' to.
    A DRO is a mini-bankruptcy and is suitable for people with debts of less than 15k and with a limited amount each month to repay debts and who don't own a house or anything.
    IF a DRO is not suitable don't panic as there are plenty of options/solutions out there- it's just a matter of finding the right one.
    df
    Making my money go further with MSE :j
    How much can I save in 2012 challenge
    75/1200 :eek:
  • dancingfairy
    dancingfairy Posts: 9,069 Forumite
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    On the face of it from what you've said it sounds like a DRO might be a good plan for you but I'd go through the debt charities - I believe there are only certain companies that are authorised to process DRO's and I have no clue whether the company you went to are good/bad/other and whether they are authorised or not.
    df
    Making my money go further with MSE :j
    How much can I save in 2012 challenge
    75/1200 :eek:
  • broker
    broker Posts: 28 Forumite
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    A DRO is for debt of <£15k and you have £13k so thats fine, you need to be renting and not a homeowner which you sound like you are so thats fine too. If you have a car then I believe it needs to be worth no more than £1500. You need to have a disposable income (income left after paying essential outgoings - bills, food etc) of around £50 or less.

    The DRO lasts 12 months. The creditors are not allowed to contact you and all the debt is taken away and the interest and charges frozen. If your situation stays the same for 12 months then all the debt is written off. During the 12 months you are not allowed any credit. After the 12 months you can have credit but prob wont get any due to having a DRO on your credit rating and it will stay on there for a further 5 yrs (6yrs in total).

    *******If your situation changes and you start working DURING the 12 months of the DRO then they basically give you the debt back and it will resume pretty much as you are now.******** Just bear that in mind.

    The £90 charge is standard set up costs

    Hope this helps
  • Dungle_2
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    That's a shame about me not being able to get work for 12 months. Like I said, only seem to get minimum wage work and it is so sporadic. If I was able to get back into full time permanent work at a decent wage again I would have no problem paying the debt off properly. It sounds like quite a catch 22 situation I am in! I will have to weigh up options when the paper work arrives. Thanks ever so much to everyone that replied with advice.
  • Tixy
    Tixy Posts: 31,455 Forumite
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    I think any vehicle could not be worth more than £1k (unless its changed recently).
    A smile enriches those who receive without making poorer those who give
    or "It costs nowt to be nice"
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