DRO is it the best option?

Mummyof5_2

Hi, I'm new the forum so bare with me


My Husband suffers with manic depression and mania along with other stuff, he's currently getting SSP from his employer.
Over the years he has gotten into debt-impulsive spending gambling etc due to his illness.
The debt is only his, the guy from CAB suggested a DRO as the debt companies keep selling on the debt and hassling him for more money or a new agreement, with his mental state at the minute he's not in a position to sort it himself as such!
He owes 3 different companies under 15k combined he has no saving and our car is worth under 1k however we have 5 children all ages 6 and under and the have savings (I don't pay anything into it but from birthdays/xmas etc) do they take this into account? And also I had saving little bits every month (while he was working) to pay for birthdays and xmas do they take this into account, or is it just what he has? He's not planning on going to back to work straight away as recovery isn't that easy, but he is planning on going back which will probably be before 12mths I really don't know what is the best option for us, the extra stress from the debt doesn't do his illness any good
Would appreciate any advice thank you

National_Debtline

Hi Mummyof5 and welcome to the forum.

I'm sorry to hear about your husband's health difficulties and I hope he is getting the support he needs with that side of things. Our friends at Mind and Rethink do brilliant work and are well worth seeking out if you've not already done so:

http://www.mind.org.uk/

http://www.rethink.org/

As for a DRO, it sounds as if it could be a suitable way for him to draw a line under these debts. To be eligible, he should not have more than £50 left over each month after paying his share of essential household bills. From what you have said, his debts are within the current limit of £15,000 and the car's value is low enough to be ignored.

Any little savings your children have can be disregarded - as long as there's no evidence that money has been deliberately "stashed away" in their accounts to put it out of creditors' reach.

Did you go through a household budget with the chap from the CAB? If so, would you be able to post it here so that we could advise further?

Regards

Dennis
Twitter: @natdebtline

Mummyof5_2

Hi Dennis


Thanks for the reply.
We are lucky that my husband is getting the right help, we have a home treatment team in place who are fab.
We haven't done a expenditure sheet yet, I'm sure if we decided to go through with the DRO then that would have been the next step, the guy from CAB said it wouldn't go over the £50 limit as we are only living on the basics. We have rent arrears and council tax arrears as the local council still haven't sorted out housing benefit claim since July, I called again today and it should be done by next week!!
Our current income per week is
SSP £87.55
Working tax £50
Child tax £260
Child benefit £72


Thanks

longtermplanner

I think a DRO sounds like a sensible move for your husband. On those incomes there will be no problem passing the "less than £50 spare income" test. Indeed with 5 children under 6 life must be pretty difficult.

It is preferable to get the benefit backdating claims sorted out before starting a DRO. There are rules about what happens if you get a 'lump sum' when you have a DRO, in some cases it may be cancelled. That's pretty rare (article about this http://debtcamel.co.uk/dro-income-up/) but it's often just simpler to avoid the whole issue by getting the benefits sorted first.

If your finances are linked with his through any joint accounts, it would be a good idea to disentangle them now. I am hoping your savings are in your name, not joint names.

Any debts that are in joint names such as council tax will become your debts when your husband's DRO starts.