Is a Debt Relief Order worth doing?

AleMrsT

Hi All,

I am in the process of filling in a SOA, but wanted to do a quick post here as I need to get everything in order once and for all.

To cut a long story short, he is my financial history of my debt:

Bought a car on finance in 2003 for around £4000.
Car got written off by an uninsured drive, so I had to take out a loan to pay off the finance.
Bought a house with my ex in 2006.
Got diagnosed with long term health condition and was off work for 9 months.
Split with ex in 2009. Sold house in 2011, in negative equity, increased loan to consolidate credit card debt (built up whilst unable to work) and to cover house sale expenses and negative equity total loan £7500.
Back into work full time, met new partner, got engaged, all looking good.
New partner got made redundant 2012, 5 months before wedding, used old credit card (after transferring to a 0% halifax card) to pay for wedding.

SO....
Debts October 2013 totalling £8573
Just done a calculation from my current balances
Debts November 2014 £7586.

I have been paying £300 a month towards my debts for the past year which is the minimum payments, so the balances haven't reduced at all, its so disheartening.
I've also had to increase my overdraft to £1150, which the bank have now said I need to reduce to £750, in increments of £50 a month. I was paying extra towards my CC's, but now had to cancel this to pay off the £50 overdraft reduction each month, so am only just paying the minimum on the CC's.

On top of this, the illness that I was diagnosed with in 2009 is now slowing me down again, so I am having to cut down my hours at work, which means my income will be less.

I just don't know what to do for the best. Cancel the reduction in hours, and risk burning out completely, stick with the plan and maybe end up in more debt.
My husband has an IVA, so we cannot have a joint account etc, so he can't help me out as he is paying off his IVA already.
No children, so not entitled to any benefits.
I was turned down for a consolidation loan because of my poor credit.
I've tried to cut my spending, we rarely go out anyway, I've sold some bits on ebay, but as soon as the money gets transferred to my bank it gets swallowed by my overdraft so I'm back to square one.

I'm just wondering whether it would be worth my doing a Debt Relief Order? My credit rating is shot anyway, and with my health already deteriorating, I can't afford any more stress.
Thanks in advance, sorry this was longer than I'd hoped!

moohound

Do you fit the criteria for a DRO, for income and assets?

AleMrsT

I've been on Citizens Advice website and this is what they say:
You're unable to pay your debts - at the moment I can (just) but when my hours change, I probably wont be able to
your debts are worth up to £15,000 - yes
you’ve got £50 or less left over each month after you’ve paid your usual household expenses - Everything I have pays the overdraft then I live off the overdraft, so I don't have anything left
you don’t own your home - rent from a friend
other savings or things of value you own, called assets, are worth less than £300. Some assets are ignored when working out the value - no assets or savings at all
you don’t own a car worth £1000 or more, unless it’s one that’s been specially adapted because you have a disability - car in husbands name, 13 year old focus that his parents paid for
you haven’t had a DRO in the last six years and aren’t going through another formal insolvency procedure, such as bankruptcy or an individual voluntary arrangement (IVA) - no, but husband has IVA
you've lived, had a property, or worked in England or Wales in the last three years. - yes

AleMrsT

do they count TV's etc as assets?

sourcrates

No I don't think a TV would be an asset as such.


Have a look here and maybe give them a ring to discuss your options :


https://www.nationaldebtline.org/EW/Pages/default.aspx

fatbelly

You could really do with a chat to a DRO Intermediary - National Debtine, Stepchange, Payplan, CAB all have them.

The sticking point may be your surplus income as you say that you have been paying £300 per month to your debts, and they have gone down 1k over the past year. Maybe your reduced hours takes that surplus below £50 - they would need to look at the detail.

In general, it good be a good solution. And tvs are not counted as assets.

[Deleted User]

AleMrsT wrote: »

Car got written off by an uninsured drive, so I had to take out a loan to pay off the finance.

Your insurance didn't pay out?

seanavfc92

http://www.stepchange.org/Howwecanhelpyou/DRODebtrelieforder.aspx

If you do apply for a DRO, do you expect any change in circumstances during the 12 month period?

[Deleted User]

AleMrsT wrote: »

I'm just wondering whether it would be worth my doing a Debt Relief Order? My credit rating is shot anyway, and with my health already deteriorating, I can't afford any more stress.
Thanks in advance, sorry this was longer than I'd hoped!

Yes absolutely, for literally these reasons alone, any bad things on the back of a DRO can be over turned by the immediate relief it brings


I went through a debt relief order in 2012 having paid 5 of 6 payday loan lenders of and a credit card beforehand, cleared more debt I ever had then went into the order when real s%!t happened (that no longer meant debt was serviceable without risk of CCJ's and where I had 'snowballed' there was no reserve for life's problems, my biggest regret but I'm sure I'd have paid more in charges so no happy medium! only way I can think of it) so I'm not sure it matters, only your present situation if you can see no way out


Please be aware some view that this is no lesser then bankruptcy but it gives a legal way to being freed of debt without running away - against years spent arguing and reliant on the state which is as much use as a chocolate teapot, I would do the same again only I'm quite debt adverse now and it's made me more determined so there is hope.
All the best x

moohound

I am wondering whether you would have to wait until your hours actually reduced before applying for the DRO.

National_Debtline

moohound wrote: »

I am wondering whether you would have to wait until your hours actually reduced before applying for the DRO.

Hi moohound/all

Speaking as an intermediary, we would want OP to fit the criteria now in order to get the process underway, as opposed to expecting her to fit them in the near future. This is because we want to be absolutely sure that an applicant will not be rejected and risk losing their £90 application fee.

OP - I would recommend that you get a suitable basic bank account opened ASAP so that you are no longer servicing the overdraft as a priority. The less preference shown to any of your creditors, the more smoothly an application can proceed once you meet the criteria.

Dennis
@natdebtline