HELP re: DRO and Tax Credit Overpayment

pixie1980

I'm new so be gentle with me!

I had finally decided to stop being an ostrich and remove my head from the sand. I filled in the online thingy on the stepchange (CCCS) website and it recommended that I apply for a DRO. I got my pack through the post and sent off for my credit report.

Now Tax Credits have decided that I owe them £15k in an over-payment! This because I stupidly didn't tell them that my partner moved in with me . Although in my defense this would have made absolutely no difference to the amount of the award as my partner is currently full-time at further education college with no income. The tax credit's lady I spoke to on the phone today said if I fill in a dispute form explaining the error, why it was made and that the error was not made in an attempt to commit fraud (as I have not gained any more money than I would have in a couple claim with my partner) then the dispute team will PROBABLY apply notional entitlement and the entire over-payment will be wiped out.

So my question is really what my best course of action would be at this point.

Should I apply for the DRO as the over-payment is technically not a debt yet and may never become one if tax credits agree to notional offsetting bearing in mind that no action will be taken to recover payment till the dispute is settled either way?

Should I wait for the outcome of my dispute with tax credits (bearing in mind that I am pretty close to the £15k and some of my creditors are threatening court action etc) and then apply for the DRO if they cancel out the over-payment or apply for bankruptcy if they refuse? And if I apply for bankruptcy if the dispute is not in my favour will the over-payment be written off hen I am discharged or will I still have to pay it back?

Sorry this is such a long post I feel like I've written an essay.

Thanks Pixie x

debt_doctor

Hi,

Well at the moment, the amount has been demanded so you are not currently eligible for a DRO. If you went BR now it would be included in your BR along with your other debt.
If you choose to wait until (if) the IR change their decision and decide you owe nothing, then a DRO is back in play again - providing your other debt hasn't risen above £15k.

DD

pixie1980

Thanks for your reply. I don't really know what to do now. I don't want my debts to keep spiralling and I am unlikely to see an improvement in my cirumstances for a while as I am going on Maternity leave in March. My partner doesn't finish college until June and is hoping to find a job he can commence once the does but obviously that isn't set in stone with the current economic climate. I don't want to go bankrupt if I can at all avoid it. For one thing I do not have the money to pay for the fee and also knowing my luck I will go for bankruptcy and then get confirmation that HMRC are offsetting the overpayment. Conversely if I wait it out they will probably decide I have to pay it back. Aaargh. I wish I could turn back time and never have got myslf into this mess

Pixie x