DRO and water bill

Gordie1975

Hi there, i applied through the step charity for a debt relief order, this morning i received the official approval letter from the insolvency agency.:j
However, when doing my final checks the step charity person said my water bill needed added to the dro as it was classed as a debt.
I explained that i get a bill at the beginning of the year, with a plan to pay it over 10 months, as its the beginning of the year i had just got my plan from the water board, so i gave them so the amounts stated.

Now, this years bill amount and my water company has been added to my DRO.
Im now a bit confused by this, as according to the rules im not allowed to make any payments to the debts covered on the DRO, so what happens with my water rates?, do/can i still pay despite it being included in the DRO?

Surely the water board wont be happy to keep supplying me with water for the next year knowing i wont be paying.;)

I tried to call step change after work but the office is closed.

Thanks for any help.

fatbelly

You may find your water company starts you with a new account from the day of the DRO.

That's because most have an 'insolvency clause' allowing them to do this.

If you don't understand what they've done, challenge it.

Gordie1975

fatbelly wrote: »

You may find your water company starts you with a new account from the day of the DRO.

That's because most have an 'insolvency clause' allowing them to do this.

If you don't understand what they've done, challenge it.

Thanks, honestly it really makes no difference to me as they cant cut my water off, so i guess it would be a new account, and id pay normally just like before, i just cant understand why it gets included, also as during the dro i cant get more than £500 debt, what if my next bill for the year is £520, would that make my dro fail?

i will give step change a call tomorrow.

fatbelly

A water bill isn't the same as credit, so no need to worry or overthink this. If you were up to date with your water bill then, although there was no downside to including it, there was probably no upside either.

This is the official guidance:

Water Rates

The guidance in relation to bankruptcy and the effects on water rates is quite clear and there is no reason to believe that this guidance is not equally applicable to Debt Relief Orders.

Where a debt is due and payable on a certain date, but is allowed to be discharged over a period up to the ensuing year, the amount of the debt is known as at the 1st April for the relevant billing year, that debt is a liquidated debt and thus capable of inclusion in a Debt Relief Order.

How a water rates bill will be dealt with will be dependant upon the charging regime operated by each provider, however where water is supplied under a charges scheme that is rate-based rather than metered, the charges scheme may provide that any standing charges are due and payable in advance, generally!on 1 April each year. Therefore, the whole of that year’s charge, or unpaid balance at the date of the Debt Relief Order, may be scheduled in the application, in addition to any arrears from previous periods. As the whole debt becomes due prior to the insolvency, it is a qualifying debt.

It is the responsibility of the intermediary/debtor to establish the water company’s position with regards to the debtors account and where the full amount for the year may be scheduled, it should be scheduled.

The Insolvency Service are aware that as a result of legal advice received by various water authorities and with the approval of OFWAT, many water authorities have now amended their charging regimes to include an “insolvency clause” which they state allows them upon the making of a Debt Relief Order, to apportion their water charges pre and post order.
Intermediaries should where appropriate continue to schedule the full years water charges in a DRO application, however you must ensure that your clients are apprised of the possibility that an insolvency clause may exist within a water authorities charging regime and if that is the case, then upon the making of a DRO the water authority may apportion their charges pre and post order and issue a revised water bill for services provided subsequent to the making of the order.
Charges for metered supplies are treated differently as, generally speaking, the meter will be read at or about the date of the Debt Relief Order and the amount to be scheduled in the DRO based on that reading. New supplies will be paid for when charged.

Sabrina2000

same with council tax or any forward payments. They are gone up in smoke, you wont get another bill for another year or howhower long.

Gordie1975

just an update, i spoke to step change today, and they have told me i should just continue to pay my water bill as normal, as the water companies are allowed to simply issue a new bill even if the previous one is included in a DRO.

It still doesnt sound right to me, but they are the experts. so i shall be doing as am told.:D

Thanks for the advice.

fatbelly

Gordie1975 wrote: »

just an update, i spoke to step change today, and they have told me i should just continue to pay my water bill as normal, as the water companies are allowed to simply issue a new bill even if the previous one is included in a DRO.

It still doesnt sound right to me, but they are the experts. so i shall be doing as am told.:D

Thanks for the advice.

It's only 'right' if there's an insolvency clause in the water company's terms and conditions. Ten years ago, none of them had one. Now most do. But unless Stepchange have identified your water authority and read their documentation, they're just making a best guess. If yours does what we expect them to do, feel free to challenge them and say 'show me the clause'.