DRO Application - Recent Credit use

Jasondad

Hi,

I'm currently in the process of applying for a DRO.

About a month ago I shopped at Lidl on one of my credit cards and paid some bills on another credit card. The total spend between the two cards was just under £250

Due to this recent credit spend, I was informed that it may be best to wait another month or two before submitting my DRO application.

Nearly forgot to mention, I'm very close to the £20k DRO limit. If I wait another month or Two, I will go over the limit for sure.

Submit now or wait another month or Two? Can anyone advise on this please.

wba31

Ultimately it's your call, it's your DRO.

Using the credit recently could mean the card company appeal the DRO on the basis that the money was borrowed with "no reasonable intent to repay," however if they did that they can do that submitting now, or submitting in 2 months time?

I've never known of a DRO being revoked for this reason (however that's only my own experience) so if you are close to £20k I would maybe encourage you to get it in and if the DRO Unit ask about it we could build a case of if it happened prior to debt advice etc

Jasondad

Thanks wba31. Really don't know what to do about this. I'm desperate to get rid of this debt. I have been repaying it for over 6 years but can't afford to continue. However, would be stupid to waste £90 if they will just reject the application.

If they where to rejected the application, I'm assuming I can re-apply?

Would it be an idea to make a partial payment to these creditors? by doing so, would it invalidate the "no reasonable intent to repay" argument or would it just make things worse?

DorisTrousers

If you spent the money after being advised that a DRO was an option for you then you could be on, potentially, dodgy ground. If you spent it before, then that was the normal scheme of things.

Very unlikely to lead to revocation in that instance.

wba31

Doristrousers has summed it up well

Who is the card company? I don't know much about how they all work but if it's a big company, who get many notifications daily I imagine, are they gonna look through each case to pick out a few hundred pound to lodge an appeal? Certainly within 30 days?

As much as us advisors can advise around this, it has to be your shout - with your intermediary...

If the order went in, it would be approved for the creditor to be notified, then if there was an appeal and it was upheld, the order would be revoked so you could not apply again for 6 years.

An individual can only apply again immediately if it's declined, which is usually for non-payment of fee or immediate eligibility issues they can be changed

Jasondad

DorisTrousers wrote: »

If you spent the money after being advised that a DRO was an option for you then you could be on, potentially, dodgy ground. If you spent it before, then that was the normal scheme of things.

Very unlikely to lead to revocation in that instance.

Thanks DorisTrousers. The credit spend was just before I filled in my budget sheet with my intermediary and was advised that a DRO was a solution to my debt.

wba31 wrote: »

Doristrousers has summed it up well

Who is the card company? I don't know much about how they all work but if it's a big company, who get many notifications daily I imagine, are they gonna look through each case to pick out a few hundred pound to lodge an appeal? Certainly within 30 days?

Thanks again wba31. The creditors in question are Mint Card and Halifax Credit Card. I'm more concerned about Halifax as they seem to go the extra mile to make your life difficult, based on my experience.

I'm thinking of asking help from family to make a minimum payment on both of these creditors, so they don't have a good argument for making an appeal on recent credit expenditure?

Making the regular minimum payment on the first creditor would cover the recent credit expenditure. Making the regular minimum payment on the second creditor would cover half of the recent credit expenditure.

Would asking the insolvency service, prior to submitting the application be an option?

I realise you guys can only give general advice. However all knowledge and experience is helpful and appreciated.

wba31

If family make payments for you, make sure they pay directly. If they gave you the money and you transferred it on, it could be deemed preferential payments if other debts are unpaid.

HOWEVER you mention in your reply to doristrousers this occurred prior to debt advice? If my client did this, and there was an appeal, I'd inform the insolvency service that it occurred prior to debt advice so you weren't to know that what you were doing was wrong...