DRO Questions

Catman7

Hi my dad is looking to get a DRO and has a few questions

He has some premium bonds for about £2000 will they know about them or is it best to cash them in and close the account.

He's rents a TV and is not in debt with them all payments up to date was told by Payplan he can't get a DRO because of this is that true?

Thank you

fatbelly

Catman7 wrote: »

Hi my dad is looking to get a DRO and has a few questions

He has some premium bonds for about £2000 will they know about them or is it best to cash them in and close the account.

He's rents a TV and is not in debt with them all payments up to date was told by Payplan he can't get a DRO because of this is that true?

Thank you

Hi Catman7

He needs to read up about DROs. There is basic info here

https://www.nationaldebtline.org/EW/factsheets/Pages/debtrelieforders/droadvice.aspx

but we can give more detailed info if it is needed.

The TV should not be a problem. It may be technically true that TV rental is not an expense that the DRO Unit would allow but it is likely (unless it's some sort of megabeast TV) to be small enough as to come out of the £50 surplus.

The latest guidance says

If any of the applicant’s expenses don’t fit within the categories provided, please enter the sum of the additional expenses in the ‘Other expense’ field and briefly describe the nature of the expenses in the ‘additional information’ section of the submission page

The 2k savings is more of a problem as the asset limit (everything apart from a car, which has a separate limit of £1000) is £1000.

He will need £90 for the fee but the rest should be used to repay creditors on a pro-rata basis, or used in normal household expenditure, before doing a DRO.

How much is his debt total?

Catman7

fatbelly wrote: »

Hi Catman7

He needs to read up about DROs. There is basic info here

https://www.nationaldebtline.org/EW/factsheets/Pages/debtrelieforders/droadvice.aspx

but we can give more detailed info if it is needed.

The TV should not be a problem. It may be technically true that TV rental is not an expense that the DRO Unit would allow but it is likely (unless it's some sort of megabeast TV) to be small enough as to come out of the £50 surplus.

The latest guidance says



The 2k savings is more of a problem as the asset limit (everything apart from a car, which has a separate limit of £1000) is £1000.

He will need £90 for the fee but the rest should be used to repay creditors on a pro-rata basis, or used in normal household expenditure, before doing a DRO.

How much is his debt total?

About £16,000 he is retired and part of his pension pot if that makes a difference and tv is rental but is a refurbished plasma not a new one.

National_Debtline

Hi Catman7,


TV rentals are a tricky one, and the budget on a whole really has to be assessed to give him a clear answer about whether it would be a permitted expense, but generally speaking, if the rental is less than £50pcm it is normally ok.


I agree with fatbelly that the savings are the biggest issue and fatbelly is right about possible options to use these savings towards the debts or essential household items so your dad can qualify. I would only add that it would be wise to take tailored advice for your dad before doing anything with them, as the legislation regarding DRO's is more complicated than it appears. Any of the free debt charities can guide you about this,


Laura
@natdebtline

fatbelly

Catman7 wrote: »

About £16,000 he is retired and part of his pension pot if that makes a difference and tv is rental but is a refurbished plasma not a new one.

I don't understand 'part of his pension pot'

Does he have access to a scheme, where you build up a sum, then draw it down? If so, and he is over 55 then this may be a factor in whether he can have a DRO, but as the position stands at the moment it would not be in bankruptcy.

Not as straightforward as we thought...

Catman7

fatbelly wrote: »

I don't understand 'part of his pension pot'

Does he have access to a scheme, where you build up a sum, then draw it down? If so, and he is over 55 then this may be a factor in whether he can have a DRO, but as the position stands at the moment it would not be in bankruptcy.


Not as straightforward as we thought...

No he got a lump sum a few years ago and has some left over, a pension he forgot he had and had be trying to find him for years lol

Has decided to go bankrupt now

mwarby

Is TV actually rented, or is it on credit ? (Not many places renting TVs these days surely). If it's on credit it'll be his to keep and debt could be included in DRO

Catman7

mwarby wrote: »

Is TV actually rented, or is it on credit ? (Not many places renting TVs these days surely). If it's on credit it'll be his to keep and debt could be included in DRO

Rented but you will be surprised how busy these companies are renting out TVs why because technology changing all the time and can upgrade to the latest tv and plus have no repairs to pay for

fatbelly

Catman7 wrote: »

No he got a lump sum a few years ago and has some left over, a pension he forgot he had and had be trying to find him for years lol

Has decided to go bankrupt now

So he has 2k in premium bonds and some cash. A DRO is out for the moment and if he goes bankrupt he loses all that money.

Catman7

fatbelly wrote: »

So he has 2k in premium bonds and some cash. A DRO is out for the moment and if he goes bankrupt he loses all that money.

Yep he realises that, spoke to someone at the national debt line how suggested he can keep the tv on rental but would have to downsize to a small one and for a cheaper one

sourcrates

Why not send the rented TV back, get rid of it from the equation, use his savings to buy a new TV, nothing too flash (no one actually comes round to look at what model telly you have) any savings over the £1000 DRO threshold, pay to creditors on a pro-rata basis, job done.

A DRO is much simpler than Bankruptcy would be, all he has to do is be a bit canny with how he organises things, and he should meet the criteria.