Newbie - DRO questions

DebtWoes

Hi, I've been researching my debt options and I'm considering a DRO. It's difficult as my situation is quite changeable (never good!) and I'm considering going from full time to part time work (to help with mental health condition which has been classified as a disability). I have some quite specific questions relating to DRO, hopefully I'll be able to get some help

INCOME

1. Will it cause an issue if I'm seen to have gone from full time to part time work? If I decide to do this, the DRO would hopefully happen shortly afterwards.

2. Am I still allowed to make pension contributions whilst working? Will these be analysed...what sort of percentage is too high?

EXPENSES

3. Is there any guidance available on what sort of amounts are allowed for different types of expenditure? I always struggle with this. I have no records and I'm no good with numbers.

DEBT

4. In my debts I have a CCJ with a suspended attachment of earnings and council tax with a suspended attachment of earnings (have gone through the liability order and all of that...). Are these ok to be included?

GENERAL

5. Part of my debts are due to gambling and I still gamble heavily (bad bad bad bad bad). Will this cause a problem? Will they want to look at bank statements?

6. Is there any legislation relating to DROs that I can read? I've read the StepChange and National Debtline guides but was hoping to read the actual law on this.

7. Would I need to get new bank accounts, as with bankruptcy?

Thanks for reading, any help would be very much appreciated.

midnitegremlin

DebtWoes wrote: »

7. Would I need to get new bank accounts, as with bankruptcy?

My understanding is that if you had an overdraft written off, the account is closed down. I'm not sure how it affects accounts that are in the black? I have a natwest one in the black which is where my wages go. People might correct this, but I don't think an account without an overdraft is classed as debt.

DebtWoes

Hi, thanks for the response. I have a couple of accounts with overdrafts that have long since defaulted and are with collection agents. So I'm just thinking about the ones I currently have that have no overdraft, hopefully they will be ok.

Any thoughts on the other questions would be much appreciated, I know they are quite specific.

midnitegremlin

No worries. If the account has no overdraft and none offered, I *think* it might be OK, although I'm happy to stand correct. They *might* be worried that you set up direct debits etc, then default on them, but don't know.

As for the other points, I think that the expences are set by yourself, but they may indeed look at what and why you are spending on eg gambling. It's hard to say though. I'm surprised no-one else has replied to be honest. Maybe repost on the main debt discussion forum? (This one: http://forums.moneysavingexpert.com/forumdisplay.php?f=76 )

DebtWoes

Thanks, I wanted to post in the correct forum so I'll leave it until tomorrow to see if I get more replies :-)

fatbelly

That's a lot of questions!

DebtWoes wrote: »

Hi, I've been researching my debt options and I'm considering a DRO. It's difficult as my situation is quite changeable (never good!) and I'm considering going from full time to part time work (to help with mental health condition which has been classified as a disability). I have some quite specific questions relating to DRO, hopefully I'll be able to get some help

INCOME

1. Will it cause an issue if I'm seen to have gone from full time to part time work? If I decide to do this, the DRO would hopefully happen shortly afterwards. No

2. Am I still allowed to make pension contributions whilst working? Will these be analysed...what sort of percentage is too high? Guidance is vague on what would be excessive - see below. If you just make normal contributions you would be OK but I can't put a figure on it.

EXPENSES

3. Is there any guidance available on what sort of amounts are allowed for different types of expenditure? I always struggle with this. I have no records and I'm no good with numbers. Yes, and your intermediary has these figures

DEBT

4. In my debts I have a CCJ with a suspended attachment of earnings and council tax with a suspended attachment of earnings (have gone through the liability order and all of that...). Are these ok to be included? Yes, they must be included

GENERAL

5. Part of my debts are due to gambling and I still gamble heavily (bad bad bad bad bad). Will this cause a problem? Will they want to look at bank statements? Gambling debts should not cause a problem but obviously this is not a legitimate expense so if you still gamble heavily there may be trouble ahead

6. Is there any legislation relating to DROs that I can read? I've read the StepChange and National Debtline guides but was hoping to read the actual law on this.

http://www.adviceuk.org.uk/wp-content/uploads/2013/06/Intermediary-guidance-v14.doc.pdf

7. Would I need to get new bank accounts, as with bankruptcy? Not necessarily. If not overdrawn it does not get a mention in the DRO. Most accounts are unaffected. Nat West may downgrade you to a basic account

Thanks for reading, any help would be very much appreciated.

Excessive Pension Contributions
If it is found that the debtor has made excessive contributions into any type of pension arrangement, and that, in making these payments, the debtor unfairly prejudiced his/her creditors, they may be subject to a Debt Relief Restrictions Order.
In considering whether the pension contributions were excessive, the court will consider:
 whether any of the pension contributions were made to put assets beyond the reach of the debtor’s creditors
 whether the total amount of contributions was excessive considering the debtor’s circumstances when they were made
If the official receiver considers that the creditors have not been unfairly prejudiced or the loss to creditors is not significant, no further action will be required.

fermi

Thank you fatbelly.

DebtWoes

Thanks that is massively helpful :-)