How much damage is done??

LittleAoife

I have spoken to a lovely gent from CAP and they have suggest 2 options for my debts.
After looking at my SOA and making a few tweaks here and there they have decided that I can either 1.pay it off little by little which by their calculations will take me around 7 years or 2. Apply for. DRO and as I have no assets or car etc I would have all the debt gone in 1 year.
While this sound a great I'm not sure about
1. The implications of all the debt being written off for any future financial plans eg. Once I am in a perm job and settled getting a mortgage (this won't be for at least a few if not more years) and if my conscience can handle just 'wiping' off all the debt and not paying hardly any of it back!
The other option is to go bankrupt though they say there is no point in this if I qualify for DRO?.
Can you please letme know what you think of DRO and what damage it really does to your financial future.
If I do get a DRO will I ever be able to get a mortgage, ever!?
Thanks for your time.

toomuch2

One of the other posters suggested I look at Debt Camel http://debtcamel.co.uk/debt-options/dro/ . The site has some really useful information alongside the pros and cons of DROs IVAs and bankruptcy.

Hope this helps

UpToMyNeckInIt

Sounds like you are being given the choice of a DRO or a DMP.

Both will severely damage your credit file, but I understand that with the DRO the damage lasts 6 Years from your FIRST repayment. (Maybe worth double checking that on the BR/DRO board, but I assume this is the case as it is with other forms of insolvency).

The DMP will see your credit file impaired for 6 Years after your LAST payment, so 14 Years in total (assuming you repay within the 7 Years).

Good as ‘Debt Camel’ is, it fails to tell you about that little downside of DMP’s.

Once your credit file recovers, you should be able to lookinto a mortgage, other credit etc.

Thus if getting a mortgage is your goal, then go for the DRO– your credit file will recover more quickly.

longtermplanner

There is absolutely no point in going bankrupt if you qualify for a DRO. CAP are right and I don't think anyone will disagree with this advice.

If a DMP would take 7 years to complete @ £50 a month (which is all the surplus income you can have in a DRO), that suggests your current debts are about £4,200. Is that correct?

Do you expect your finances to improve in a couple of years? If you do, then a DMP may be a better choice because it need only be for a couple of years then you can increase payments and your credit file will end up showing the accounts as settled /satisfied (depending on whether there was a default issue).

If you don't expect your finances to improve, then a DRO sounds like the sensible choice.

But that isn't because of the credit file concerns. A mortgage is not going to be a realistic option for many, many years years as you have no spare income to save up for a deposit and I wouldn't let thoughts about a mortgage affect the decision you are facing.