DRO Worry and Concern

coinxoperated

Hi all,

I'm considering taking out a DRO in the new year as it seems my situation seems to just be getting worse and I really need to just wipe everything and start again. I don't own a property, my income is -£49 after living costs/debt payments each month, and it just seems to be a never ending circle.

My credit is shot anyway, so I'm not fussed about that side of things. My concern is what is the worst that will happen if I take one out? I'm in about £8000 worth of debt on a £15k a year job. I live on my own, don't have parents I could move in with, so it would seem this would be my only option.

I have a bank account with Santander with £1330 outstanding. Do I HAVE to include this in the DRO? If I do include it, will they shut my bank account?

I'd quite like to keep Santander on side if possible, as from working within finance for a long time, its pretty obvious they 'bend the rules' if you need money/mortgages etc if you haven't upset them.

Any advice would be greatly received.

Thanks

immoral_angeluk

coinxoperated wrote: »

I have a bank account with Santander with £1330 outstanding. Do I HAVE to include this in the DRO?

Yes, you must include all debts you are aware of in your application, and your intermediary has a duty to ensure all debts are included and will obtain copies of your credit reports which will be likely to show it on there anyway.

If I do include it, will they shut my bank account?

More than likely, but you would need to check with santander what their policy is, as some bank insist on your transferring to a basic bank account with them if you include an overdraft in a DRO, whereas some will just close the account and you'd need to go elsewhere.

I'd quite like to keep Santander on side if possible, as from working within finance for a long time, its pretty obvious they 'bend the rules' if you need money/mortgages etc if you haven't upset them.

You can't, it'll be preferencing a creditor as well as purposefully lying on an application which at best would see your application refused or revoked (and the loss of your nonrefundable £90 fee...) or at worst criminal/civil sanctions.

coinxoperated

immoral_angeluk wrote: »

Yes, you must include all debts you are aware of in your application, and your intermediary has a duty to ensure all debts are included and will obtain copies of your credit reports which will be likely to show it on there anyway.

More than likely, but you would need to check with santander what their policy is, as some bank insist on your transferring to a basic bank account with them if you include an overdraft in a DRO, whereas some will just close the account and you'd need to go elsewhere.

You can't, it'll be preferencing a creditor as well as purposefully lying on an application which at best would see your application refused or revoked (and the loss of your nonrefundable £90 fee...) or at worst criminal/civil sanctions.

Thank you. I wasn't look to 'hide' the santander overdraft, I was just wondering if I was able to choose which debts I put in the order. But either way it looks like the best option.

You know its bad already when 3 mobile say no to a £10 a month contract :rotfl:

coinxoperated

Another thing...

My boyfriend (who doesn't live with me because I can't afford to feed him ) has his monthly wage paid into my bank account. Will this effect my ability to take out a DRO? As I have payslips showing my actual pay..?

debt_doctor

coinxoperated wrote: »

Another thing...

My boyfriend (who doesn't live with me because I can't afford to feed him ) has his monthly wage paid into my bank account. Will this effect my ability to take out a DRO? As I have payslips showing my actual pay..?

That will be fine so long as you can prove that the income is not yours.

DD

coinxoperated

Great!

Secondly, while i'm paying off my debts my left over money at the end of the month will be -£49.

Now once I'm not paying my debts I will of free'd up £150-£200 per month.


How does this work in the "must have less than £50 spare a month" thing?

Surely its normal for peoples 'spare cash' to be up after the DRO?

Also, I haven't actually missed payments yet. I'm just on the brink of it. Do I need to be in such a state i'm missing payments before a DRO would be accepted? As "technically" i'm paying off/paying minimum payments each month, although I'm getting into further debt by doing so...?

coinxoperated

Could someone please advise

caz2003uk

Hi,

As far as I know the £50 surplus is before debt payments, not after.

So on that basis you would not qualify as you have much more than £50 surplus.

Your best bet would be to post up your SOA to show what your outgoings are vs your incomings.

http://www.makesenseofcards.com/soacalc.html

immoral_angeluk

caz2003uk wrote: »

Hi,

As far as I know the £50 surplus is before debt payments, not after.

So on that basis you would not qualify as you have much more than £50 surplus.

Your best bet would be to post up your SOA to show what your outgoings are vs your incomings.

http://www.makesenseofcards.com/soacalc.html

Exactly this.
If your disposable income after reasonable domestic expenditure is over £50 BEFORE your debt repayments you would not be eligible.

As Caz says, post up an SOA and we'll be able to help more.

coinxoperated

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1059.69
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1059.69

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 325
Management charge (leasehold property).. 0
Council tax............................. 65
Electricity............................. 60
Gas..................................... 0
Oil..................................... 0
Water rates............................. 20
Telephone (land line)................... 22
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 200
Clothing................................ 15
Petrol/diesel........................... 80
Road tax................................ 8.5
Car Insurance........................... 115
Car maintenance (including MOT)......... 25
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 15
Pet insurance/vet bills................. 15
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 7
Presents (birthday, christmas etc)...... 10
Haircuts................................ 5
Entertainment........................... 10
Holiday................................. 10
Emergency fund.......................... 0
Total monthly expenses.................. 1042.5


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 800
Other assets............................ 0
Total Assets............................ 800

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Capital One Credit Ca..........1300......67........0
Close Motor Finance............1900......30.85.....0
Halifax........................1330......35........0
Severn Trent Water.............500.......20........0
British Gas....................600.......30........0
Santander......................1330......35........0
Total unsecured debts..........6960......217.85....-


Monthly Budget Summary
Total monthly income.................... 1,059.69
Expenses (including HP & secured debts). 1,042.5
Available for debt repayments........... 17.19
Monthly UNsecured debt repayments....... 217.85
Amount short for making debt repayments. -200.66

Personal Balance Sheet Summary
Total assets (things you own)........... 800
Total HP & Secured debt................. -0
Total Unsecured debt.................... -6,960
Net Assets.............................. -6,160

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.



Here you go!I think this leaves me with £17 ish before I even start paying debts if I'm right?

Can I also add -

The car finance is for a car i had voluntary repossesed 1 1/2 ago. I no longer have the car, and its just the balance to pay off. No interest is charged and I'm paying that off at £30 a month.

Halifax £35 is just the monthly fee for having the overdraft...

Santander is currently 0% so not paying a penny yet

Capital one is just the pure minimum payment.

I haven't made any agreement with severn trent or british gas yet (problems with meters in flat... ) but the amount i'd pay off the debt that I've put above is what I was going to try and bargain with them...

As you can see I'm in a right mess. I just think, as I'm only 22, its worth just getting it done and dusted, and in a few years once i've saved up I might be able to buy a house one day. Would like to own a house by the time I'm 30, so I'm thinking 6 years of this on my credit record actually won't drastically effect me.

Let me know your thoughts all

caz2003uk

Firstly...Is the car you own the one that you have on finance? Im presuming and correct me if im wrong that the car is probably worth more than £1000 if its a finance car as normally that would be under 5 years old?

Secondly...You said earlier that without paying debts you have £150-£200 left over...according to your SOA you only have £17.19 surplus? Where does the other money come from?

Im not a DRO specialist, although I currently have a DRO active, but Im sure IA will be along soon to have a look for you

EDIT: Ok just noticed your edit after i had posted! That explains things a bit more, so the car finance is in fact an outstanding debt, which the car you own now is not part of.