D.r.o?

FutureGirl

I'm sorting out a DRO for my mum and I just want to know that if she goes through with this, will she loose all of her credit accounts?

She has a credit account with studio, she has always paid it on time, never missed a payment, so it isn't defaulted or anything - will this need to be included in the DRO?

Thanks

sourcrates

Hi,

She would be wise to include all her qualifying debts in the DRO.

She has to have less than £50 a month left after paying all her bills.

The idea of a debt relief order is to get the debtor debt free, keeping a particular credit account open, for the purpose of getting into debt again, defeats this objective.

It's a bit of a failed strategy in my opinion, you/she should concentrate on preparing a water tight case for a DRO, and forget about future lines of credit.

FutureGirl

The account she wants to keep open is not in debt. She has a credit limit on it, but hasn't spent any of it. So it's in full credit, with £0 spend.

sourcrates

FutureGirl wrote: »

The account she wants to keep open is not in debt. She has a credit limit on it, but hasn't spent any of it. So it's in full credit, with £0 spend.

Hi,

keeping open a particular credit account, should not be her, or your priority right now.

You have come on here stating :

"I'm sorting out a DRO for my mum and I just want to know that if she goes through with this, will she loose all of her credit accounts?"


The whole idea of a debt relief order, is to get you free of debt, by keeping one account open, all she will be doing is providing a route to get back into debt again.

That defeats the whole object of the exercise in my opinion.
Its really stating "I have not yet learned my lesson, where money is concerned".

I would close the account, and concentrate on getting the DRO application approved first, as strict criteria apply.

fatbelly

Although I agree with Soucrates, the rules on DROs are quite fixed. If it's a debt it goes in, if it isn't it doesn't.

Regarding credit in a DRO moratorium:

If you wish to obtain credit of £500 or more, either alone or jointly with another
person, you must first tell the lender that you are subject to a DRO. This
restriction applies to borrowing money, and also to getting credit by acting with
the intention of getting it, even though you have not entered into a specific
agreement for it. This would include, for example, ordering goods without
requesting credit but then failing to pay for the goods when they are delivered.

So your mum would be allowed to keep her account , and not need to get permission on credit less than £500, but with '48.9% APR representative' closing the account might be a smart move