Possible DRO or DMP

fishfinger1

hello, Ive finally come to the point where I can no longer keep up with my credit card debts, ive been looking into DMPs and DROs, at present I have had no contact with the likes of step change, I currently rent and have a car valued at approx. £600, my credit card debts are about £22000 spread over 5 creditors, now I know to apply for a DRO my debt needs to be under £20000, I have spoken to my partner about the best way to deal with the debt, would it be viable for my partner to get a balance transfer card to transfer enough of my debt to take me under £20000 so i am able to apply for a DRO, Many thanks

midnitegremlin

They might check up on that and question it. Why are you thinking DRO , any specific reason? IVA might or might not be better.

HappyMJ

fishfinger1 wrote: »

hello, Ive finally come to the point where I can no longer keep up with my credit card debts, ive been looking into DMPs and DROs, at present I have had no contact with the likes of step change, I currently rent and have a car valued at approx. £600, my credit card debts are about £22000 spread over 5 creditors, now I know to apply for a DRO my debt needs to be under £20000, I have spoken to my partner about the best way to deal with the debt, would it be viable for my partner to get a balance transfer card to transfer enough of my debt to take me under £20000 so i am able to apply for a DRO, Many thanks

A DRO is just a light version of a bankruptcy. If your debts exceed £20,000 you may as well go bankrupt if you have no income and no assets. A DRO requires you have less than £50 available income each month before you make any debt repayments. A bankruptcy doesn't require that.

fatbelly

DMP or DRO? For you the answer is Bankruptcy.

If you're smart you can get your debts dealt with without your girlfriend incurring further debt.

Any IPO you get would be very small as you have less than £50 per month surplus.

fishfinger1

Thanks for taking the time to reply guys if I do a SOA would you guys have a look at it for me

absolutereturn

fishfinger1 wrote: »

hello, Ive finally come to the point where I can no longer keep up with my credit card debts, ive been looking into DMPs and DROs, at present I have had no contact with the likes of step change, I currently rent and have a car valued at approx. £600, my credit card debts are about £22000 spread over 5 creditors, now I know to apply for a DRO my debt needs to be under £20000, I have spoken to my partner about the best way to deal with the debt, would it be viable for my partner to get a balance transfer card to transfer enough of my debt to take me under £20000 so i am able to apply for a DRO, Many thanks

There is a big difference between DMPs and DROs. Both affect your credit files but a DRO is a form of personal insolvency just like bankruptcy. If it can be shown that you deliberately did something to bring down the amount of debt below the DRO threshold then your application may be rejected or, if found later, the DRO could be revoked.

Bankruptcy is a good way to wipe the slate clean but I would think twice before making that decision in your case, given the type of debt and amount. It sounds like you are still making contractual payments, if so you should be aware that credit defaults affect not only your ability to obtain credit for at least six years, but also other things such as the ability to get a mobile contract and even certain jobs. Any job in financial services (even if not in a financial capacity and not directly employed by the company) will involve a credit check.

Having been bankrupt will have a much bigger effect than just having defaults and, while you are undischarged, you will be prevented from doing a number of things so you should look into all that before making a final decision.

Can you tell us a bit more about those credit cards? Who are they with and when did you take out the cards?

fishfinger1

fatbelly wrote: »

DMP or DRO? For you the answer is Bankruptcy.

If you're smart you can get your debts dealt with without your girlfriend incurring further debt.

Any IPO you get would be very small as you have less than £50 per month surplus.

I just want an end to all this stress and worry in the easiest way possible, the word bankruptcy scares me a little I don't know why, how does it work exactly

fatbelly

fishfinger1 wrote: »

I just want an end to all this stress and worry in the easiest way possible, the word bankruptcy scares me a little I don't know why, how does it work exactly

This is the current factsheet from National Debtline

https://www.nationaldebtline.org/EW/factsheets/Pages/bankruptcy/howtogobankrupt.aspx

but the application process is changing in a big way from 5 April. However, no-one has released the detail. When they do, I'll update this thread

https://forums.moneysavingexpert.com/discussion/5400026

It's likely that those on a basic benefit (IS, JSA,ESA, GPC) would find it cheaper under the 'old' system; others should find it cheaper, and less stressful under the new one.

sourcrates

Changes to the Bankrupcy process were mentioned last year during the parliamentary consultation on changes to DRO and Bankrupcy terms.
No definite information was given, just that it was part of a wide range of changes that were in the pipeline.

Will be interesting to see if it makes the whole thing simpler, or more complex for people.

fishfinger1

absolutereturn wrote: »

There is a big difference between DMPs and DROs. Both affect your credit files but a DRO is a form of personal insolvency just like bankruptcy. If it can be shown that you deliberately did something to bring down the amount of debt below the DRO threshold then your application may be rejected or, if found later, the DRO could be revoked.

Bankruptcy is a good way to wipe the slate clean but I would think twice before making that decision in your case, given the type of debt and amount. It sounds like you are still making contractual payments, if so you should be aware that credit defaults affect not only your ability to obtain credit for at least six years, but also other things such as the ability to get a mobile contract and even certain jobs. Any job in financial services (even if not in a financial capacity and not directly employed by the company) will involve a credit check.

Having been bankrupt will have a much bigger effect than just having defaults and, while you are undischarged, you will be prevented from doing a number of things so you should look into all that before making a final decision.

Can you tell us a bit more about those credit cards? Who are they with and when did you take out the cards?

Barclaycard £5674
Barclaycard£6809
NatWest £2337
Yorkshire bank £1709
virgin £3776
nationwide £20007 (shared with partner)
im in arrears on both the Barclay card and have just had account closure letters, ive also had a letter from NatWest who have closed my account the rest are so far still upto date

HappyMJ

fishfinger1 wrote: »

Barclaycard £5674
Barclaycard£6809
NatWest £2337
Yorkshire bank £1709
virgin £3776
nationwide £20007 (shared with partner)
im in arrears on both the Barclay card and have just had account closure letters, ive also had a letter from NatWest who have closed my account the rest are so far still upto date

Bankruptcy sounds like an option you'll need to consider.

You will not be allowed to make any allowance for payments to the joint loan. Your partner will have to make the payment in full on that one but the remainder of your debts can be included in the BR. You won't ever be liable for the joint loan. What does your partner think about taking that on in full?