Cousin wants to go DRO but has 2.5K savings

hounslow_boy

Hi Again,

My cousin who lives with us has debts he cannot pay back and have any basic quality of life. He wants to get a Debt Relief Order, but it now turns out that he has a 2.5K savings bond with one of his creditors, HSBC.

He's thinking about using the 2.5K to pro-rata pay some of his debt (total 10K) off each of his creditors. Would this work?

Is he allowed to use his entire savings of 2.5K to pay debts (will still be 8K remaining) and then go DRO?

If he can do this, does it matter which of the debts he pays down? Could he use it to pay down his 4K student loan?

Thanks very much.

radio-jo

hounslow_boy wrote: »

If he can do this, does it matter which of the debts he pays down? Could he use it to pay down his 4K student loan?

Thanks very much.

If you give any creditor preferential treatment with repayments then your DRO application may well fail.

scarlet55

hounslow_boy wrote: »

Hi Again,

My cousin who lives with us has debts he cannot pay back and have any basic quality of life. He wants to get a Debt Relief Order, but it now turns out that he has a 2.5K savings bond with one of his creditors, HSBC.

He's thinking about using the 2.5K to pro-rata pay some of his debt (total 10K) off each of his creditors. Would this work?

Is he allowed to use his entire savings of 2.5K to pay debts (will still be 8K remaining) and then go DRO?

If he can do this, does it matter which of the debts he pays down? Could he use it to pay down his 4K student loan?

Thanks very much.

iff he uses this to pay debts then he must pay each creditor the same....as radio jo says..no preferential treatment...:)