Dates for budget for DRO CAB saying i have to include up to 12 months ago

knickersinatwist

Hi, I am working part time while studying as a full time student. I am about to do a DRO following CAB's advice for 13500k of debt built up over 10 years. However, i have received 10k in student loans in 3 payments spread out since Sept last year. My CAB adviser wants me to do my budget from Sept last year. I thought the budget was for the coming 12 months? To take account of the fact that i wont have debts to pay as they will be wiped under the DRO. Even taking into account the student loan income i still meet the criteria for the DRO of less than £50 per month left after expenses against income if i do a forward projection. But I am in my last year at Uni and so i wont have the student loan money after this Aprils payment. Does anyone know why i am having to include money that i had 6+ months ago when it all went on paying debts and surviving. I don't have any receipts as such for what the lump sums went on other than what went out of my bank acct for debts and normal living expenses. In sept i got £3300 from SFE which then dwindled away out of my acct covering rent of £650 a month and other bills such as Oil at £260 a go for heating etc every couple of months etc. Can anybody tell me what dates i should be using? Does it go back so far and forwards so far or does it start from the month you are submitting your DRO? I'm getting in a right pickle as i just dont know what to put on my budget form. If i include all the past SFE payments (which obviously i dont have in the bank anymore) i will be over the limit - if i only include the money due in April i will be so far in debit every month that the DRO may be refused on the grounds that i will immediately sink into debt again. thanks for any advice - gratefully received.

sourcrates

Ask for advice from National Debtline, too specific for a forum to answer.

fatbelly

Discuss with your intermediary.

It sounds like your monthly income at the moment is 10k divided by the number of months in an academic year

Outgoings are rent, food, phone, travel, clothes, tv licence, utilities - shouldn't be a problem - unless you get a decent paying job after your course finishes this year.

wba31

Once your circs change in september if you get a job, you will need to advise the Insolvency Service of the change and submit a new budget to them.

If this budget means you have greater than £50 surplus your DRO may be revoked. When this change happens, speak to your intermediary first, get their help with the budget.

National_Debtline

Hi there,

This does seem to be a little bit unusual and I would agree with fatbelly about how to calculate the budget and that you need to speak to your Intermediary to understand exactly what they want from you.

When someone applies for a DRO the Insolvency Service can investigate the last 2 years’ worth your transaction. The Intermediary may be asking you for more information to understand where the money was spent and help explain this to the Insolvency Service. If your Intermediary would like your bank statements from September 2014 to present day then I would suggest you provide them, they probably required for verification purposes but you should talk to your Intermediary.

As far as a budget is concerned you need it to balance going forward so that no other debt accrues. It is understandable that your budget may not have balanced in the past (hence the debts), but you must show what you intend to do going forward to prevent it being unbalanced. When you do the budget you will need to divide your student loan over the relevant period. So if your final payment is in April, this will be designed to last you until the end of the academic year (so 3 months). Therefore, you should divide the April payment by 3. Then you should minus your monthly living expenses such as rent, gas, electric, oil, council tax, food, travel, etc. but do not include any payments to any debts at this stage. The money that is remaining is the money for creditors (in theory), so long as this is less than £50pcm then you would still qualify for the DRO.

The budget should more or less balance before any debts are paid, if it doesn’t then you need to discuss with your Intermediary ways of boosting your income (through benefits, employment etc.) and reducing your expenses where possible.

I hope this helps to clarify some details for you.

Laura
@natdebtline