Can my wife apply for a DRO?

Hull_Tiger

Hi All,
Could someone please give me a bit of advice regarding DROs.
I am currently in the process of saving the fee for bankruptcy for debts of approx £44k. Basically I was in an IVA when both myself and my wife were made redundant within 3 months of each other. It failed after TIX refused any variation after I returned to work 16 months later.
Anyway, what I need to know is can my wife apply for a DRO after I go bankrupt?
She has debt of approx £3,500 which I am currently paying from my income.
The household income is made up of my wages and child benefit / tax credits from our two young boys.
Would this count as having no income to service her debt or is it a bit more complex? How can I work out what her 'surplus income' actually is?
Any help would be appreciated.

coinxoperated

Hull_Tiger wrote: »

Hi All,
Could someone please give me a bit of advice regarding DROs.
I am currently in the process of saving the fee for bankruptcy for debts of approx £44k. Basically I was in an IVA when both myself and my wife were made redundant within 3 months of each other. It failed after TIX refused any variation after I returned to work 16 months later.
Anyway, what I need to know is can my wife apply for a DRO after I go bankrupt? Yes she can, as an individual. Although expenditure would be split % wise between you and her, so dependant on the income coming in and what she needs to pay out for her % of the bills, she would need less than 50 quid per month left over. NOT INCLUDING DEBT PAYMENTS.

She has debt of approx £3,500 which I am currently paying from my income. - A DRO is not something to be taken lightly as it has such adverse effects on your credit history. It seems a waste to do a DRO for such a minimal amount (however large it may seem at the moment). It might be worth you going bankrupt first and then seeing how you jointly would be able to pay off her debts? It's always good if one of you has an 'ok' credit history for renting, phone contracts etc.
The household income is made up of my wages and child benefit / tax credits from our two young boys.

Would this count as having no income to service her debt or is it a bit more complex? I'm sure a CCCS or CAB advisor will be along soon to help exactly - I'm not an expert.

Look at the income that comes in jointly or her name only.

For example:

If you have 200 per month coming in in tax credits in your name, that would be classed as your income.

If you have 200 per month coming in in tax credits in her name, that would be classed as her income.

If you have 200 per month coming in in tax credits in her and your name, that would be classed as 50% her income = 100 per month.

Is the child benefits / tax credits in her name or joint? If joint, split 50% of the income to her. If she doesn't work, is she claiming JSA?

How can I work out what her 'surplus income' actually is?

Income she has in her name or jointly, against a small percentage of the rest of the household bills (rent, electric, food etc).


Any help would be appreciated.

Please do speak with CCCS or CAB about the process for full expert advise. I did a DRO with CCCS last March and they made it all pretty simple and explained everything.

Good luck and heres to a Debt Free 2013! :beer:

StepChange_James

I think coinxoperated has done a great job in their reply. It can be tricky to plan an individual budget for people who've little or no income but if there are benefits such as tax credits and child benefit that are in joint names then they can be used.

As said above, it's worth considering all the options before committing to a DRO but I've recommended them to people with less overall debt in the past. It really depends on the circumstances.

I'd recommend giving us a call and we can talk through the options: http://www.stepchange.org/Contactus.aspx.

Regards

James