In last 3 months of DRO, potential for substantial pay rise

Kidston_2

Hi, my husband is currently under a DRO. It ends towards the end of April. But a chance came up at his work recently for a promotion and a substantial pay rise to go with it.

He currently earns just over £18000 and the new job is offering £27000. He has just over £10000 worth of debt which was impossible for him to pay when I was no longer able to work.

If he gets the job (he has an interview for it), what would happen with the DRO? If he had to pay back the debt, it would take two years (minus any interest) to pay it all back, even if he sacrificed every extra penny he earns. If he got the job, it would only be two months of the DRO he would be getting the extra money, which is frustrating.

Can anyone offer experience on similar situations, or advice on what would happen? If it helps, the DRO was done through the CAB.

Thanks in advance

National_Debtline

Hi Kidston

This is an interesting question. Obviously, I don't know the full ins and outs of your husband's DRO application, so any views here are qualified.

If he secures the promotion and thus moves on to the higher wage before the end of his DRO moratorium, he will have an obligation to inform the Insolvency Service of the changes and yes, there is a very strong likelihood that it will be revoked. First though, I would advise him to contact his Intermediary at the CAB - if that proves difficult for any reason, he should contact one of the free advice agencies such as us or Stepchange - in order to do a review of his income and expenditure. In some cases, increases in income can be cancelled out by reasonable increases in living costs, but where the income jump is as big as this one, that is probably unlikely.

If he did end up having his DRO revoked, but was able to repay the outstanding debt within approximately two years, this would leave him in a similar position to where he would have been had he petitioned for bankruptcy last April instead of the DRO. He would have been asked to start making payments into the bankruptcy if his circumnstances improved sufficiently before his discharge (which usually happens after 12 months). These contributions can continue for up to three years from the date of the bankruptcy order.

I hope that isn't too rambling. If you have further questions please ask.

Regards

Dennis @NDL