IVA & DRO

IVA & DRO

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DRO advice/complications

Hi all

Advice would be much appreciated on the below:

My understanding of a DRO is £50 surplus is the maximum required in order to qualify. My surplus is around £100 so feel excluded for the sake of £50. would I be wrong in thinking to move and rent a property that costs £100 extra a month to qualify for this?

secondly, can I use car HP as part of my household outgoings?

thirdly, my husbands disposable income is around £500 after we pay everything jointly but no debts in his name. Would this affect the DRO as of course he would use that to support both of us technically.

Many thanks guys

Comments

  • Posts: 21,799 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Talk to an Intermediary - there is a lot of flexibility in the income calculations.

    As for the car on HP, is the agreement in your name? Is it actually Hire Purchase? Are there any arrears? How much is it valued at on Parkers Guide? Example scenarios as below
    Example Scenarios:

    Debtor has arrears on a hire purchase agreement.

    Action: The debtor can either:

    1. Schedule the whole liability in the DRO application and this would count towards £15K liability parameter, or

    2. Schedule just the arrears in the DRO application and choose to exclude the future contractual HP liability from the DRO application, in which case the arrears would be a specified qualifying debt and count towards the £15K liability parameter and the excluded element of the HP liability would not be a specified qualifying debt and not count towards the £15K liability parameter. Inform DRO Unit about any HP liability appearing on the debtor’s Experian report that the debtor has chosen to exclude

    Outcome:

    1. Whole debt is a qualifying debt and one that would be discharged at the end of the moratorium period; Debtor unable to maintain payments and creditor’s only remedy would be to seek recovery of their goods.

    2. Scheduled arrears are a qualifying debt and one that would be discharged at the end of the moratorium period; Excluded element of HP liability is not a specified qualifying debt and the debtor would remain liable for the remaining HP liability. If the goods in question were for the debtor’s basic domestic needs the HP repayments would be an allowable expense. However it is likely that if arrears are scheduled in a DRO application the debtor would be in default and the HP company may seek recovery of their goods.

    Debtor has hire purchase agreement with no arrears.

    Action: The debtor can either:

    1. schedule the HP liability in their DRO application and this would count towards £15K liability parameter, or

    2. choose to exclude the HP liability from the DRO application in which case it would not be a specified qualifying debt and not count towards the £15K liability parameter. Inform DRO Unit about any HP liability appearing on the debtor’s Experian report that the debtor has chosen to exclude.

    Outcome:

    1. Debt is a specified qualifying debt and one that would be discharged at the end of the moratorium period; Debtor unable to maintain payments and creditor’s only remedy would be to seek recovery of their goods.

    2. Debt is not a specified qualifying debt and the debtor would remain liable for HP liability. If the goods in question were for the debtor’s basic domestic needs the HP repayments would be an allowable expense.

    Debtor has hire purchase agreement with no arrears for a motor vehicle worth £3000.

    Action: The debtor can either:

    1. schedule the HP liability in their DRO application and this would count towards £15K liability parameter, or

    2. choose to exclude the HP liability from the DRO application in which case it would not be a specified qualifying debt and not count towards the £15K liability parameter. Inform DRO Unit about any HP liability appearing on the debtor’s Experian report that the debtor has chosen to exclude.

    Outcome:

    1. Debt is a specified qualifying debt and one that would be discharged at the end of the moratorium period; Debtor unable to maintain payments and creditor’s only remedy would be to seek recovery of their goods.

    2. Debt is not a specified qualifying debt and the debtor would remain liable for HP liability. As the vehicle in question is worth in excess of £1000 the repayments on the HP agreement would not be an allowable expense.

    Debtor has hire purchase agreement with no arrears for a motor vehicle worth £900.

    Action: The debtor can either:

    1. schedule the HP liability in their DRO application and this would count towards £15K liability parameter, or

    2. choose to exclude the HP liability from the DRO application in which case it would not be a specified qualifying debt and not count towards the £15K liability parameter. Inform DRO Unit about any HP liability appearing on the debtor’s Experian report that the debtor has chosen to exclude.

    Outcome:

    1. Debt is a specified qualifying debt and one that would be discharged at the end of the moratorium period; Debtor unable to maintain payments and creditor’s only remedy would be to seek recovery of their goods.

    2. Debt is not a specified qualifying debt and the debtor would remain liable for HP liability. As the vehicle in question is worth less than £1000 the repayments on the HP agreement would be an allowable expense.
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