Dro / iva?

hunnybeanz

Who do I need to contact to find out if I can qualify for one?
Stepchange have suggested to me a DMP, but it looks like its going to last over 5 years, and I'd like to know more about whether we would qualify for alternatives. We have no assets, not homeowners etc, so its an avenue I'd like to look at.

sourcrates

Hi,

In order to qualify for a DRO you must have less than £50 left after all essential bills are paid, this is where most people fall down on the qualifying criteria.

How much debt do you have ?

As an IVA is only really suitable if you owe 30k plus, due to the level of fees involved.

The_Debt_Expert

Hello, StepChange would advise you of all realistic options based on your budget. If they didn't recommend an IVA then this would be for a reason. You could always ask them why an IVA hasn't been recommended?

Re Sourcrates post, that's a big generalisation to say an IVA is only suitable for debts over £30,000, it depends on your overall circumstances. Plenty of people do a successful IVA with debts even under £20,000. However if you can clear the debts in say 6-7 years, a DMP may be better.

sourcrates

The_Debt_Expert wrote: »

Re Sourcrates post, that's a big generalisation to say an IVA is only suitable for debts over £30,000, it depends on your overall circumstances. Plenty of people do a successful IVA with debts even under £20,000. However if you can clear the debts in say 6-7 years, a DMP may be better.

Hi,

Yes it was a generalisation, lots of IVA's have been mis-sold to people in the past, although there is no minimum debt amount to qualify for an IVA they are usually most suitable for people with large amounts of debt, where bankruptcy is not an option because, perhaps they have a property to safeguard.

Usually you can only generalise on a forum such as this, as you are never 100% sure of a debtors circumstances.

DorisTrousers

The_Debt_Expert wrote: »

Hello, StepChange would advise you of all realistic options based on your budget. If they didn't recommend an IVA then this would be for a reason. You could always ask them why an IVA hasn't been recommended?

Anecdotal evidence only, but StepChange seem to be very reluctant to recommend BR, IVA or even DRO where a debt can be cleared by repaying in full in under 10 years. I have paperwork on my desk that states DRO as being unsuitable as the debts (in this case) could be cleared by paying £45 per month for 9 years and 11 months. Why this may be, and whether it is a policy that they would be happy to admit to publicly, is a matter for them, but it does underline the importance of "shopping around" when exploring options.

fatbelly

OP - if you give us some more info, we can better advise.

Would you be able to post a statement of affairs? Calculator here

http://www.stoozing.com/calculator/soa.php

Citizens Advice still do the majority of DROS so you could see if your local office has intermediaries.

National Debtline are a good source of impartial advice too.

The_Debt_Expert

DorisTrousers wrote: »

Anecdotal evidence only, but StepChange seem to be very reluctant to recommend BR, IVA or even DRO where a debt can be cleared by repaying in full in under 10 years. I have paperwork on my desk that states DRO as being unsuitable as the debts (in this case) could be cleared by paying £45 per month for 9 years and 11 months. Why this may be, and whether it is a policy that they would be happy to admit to publicly, is a matter for them, but it does underline the importance of "shopping around" when exploring options.

I'm afraid that's just conjecture on your part. SC will be required under FCA regulations to make their customers aware of all available debt solutions to them. If a DRO was a realistic option they, like any DMP company, would have to present this. Maybe the client has assets that rule them out? Maybe they have a CCJ or priority arrears that will be written off in the DRO and make the surplus too high?

DorisTrousers

As I said, anecdotal evidence only. Happens worringly often for my liking though, anecdotally of course.

As an approved intermediary myself however, the case in question was granted a DRO, so your speculation as to why it wasn't a DRO is somewhat moot. There was indeed a CCJ, along with priority arrears, all of which are now covered by the DRO.

Whilst there was an allowance in expenditure for such items in the proposed DMP, these were clearly unaffordable along with a further £45 for the non priority stuff. I am very sure that this may have been an isolated case, but getting a second opinion as to options is always a good idea, regardless of who you initially speak to. That is the most important point here.

Former_StepChange_Linsi

Hi

I’ve just come across your post; I hope you don’t mind me replying.

Choosing a debt solution can be a big decision and I really want you to feel confident that you’re taking the right steps towards being debt free.

I’d recommend getting back in touch so we can have a look at your options again, here are our contact details.

I can’t say now whether or not you’d qualify for a DRO or if an IVA would be better for you, but this is something we can look into when you call.

I hope this helps,

Linsi

hunnybeanz wrote: »

Who do I need to contact to find out if I can qualify for one?
Stepchange have suggested to me a DMP, but it looks like its going to last over 5 years, and I'd like to know more about whether we would qualify for alternatives. We have no assets, not homeowners etc, so its an avenue I'd like to look at.

sourcrates

In 9/10 cases the surplus at month end is more than the £50 allowable.

Hence the reason why a DRO is not recommended.

Playing around with your budget figures can remedy this, as they are seldom accurate enough for the real world.

hunnybeanz

Hi guys, thanks for replying
Sorry if I'm intermittent with replies back to you all, but stuck in work all the time at the minute (Christmas and all...)

For now, I'll post up my SOA, although I'm not fully concrete on monthly exp. at minute as I'm still going through everything.
The figures listed, are pretty close to accurate.
The gas and electricity are SUPER high, I know. The boiler and heating system is broken, so we have to use electric heaters when its really cold as daughter is prone to pneumonia (premature), and hot water, shower and cooker seem to eat gas
I'm looking at switching suppliers but I have outstanding arrears (from previous address) with present supplier, and they agreed to take payment from meter, which helps.
Also, in terms of debts... there are duplicate accounts on there as its the combination of mine and my partners income, exp. and debts.
I'll do a singular one tomorrow when I get home, and add that up too.

Thanks again for reading and replying, I'll reply to individual posts as soon as I get chance xxx

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 0

Monthly Income Details
Monthly income after tax................ 680
Partners monthly income after tax....... 1120
Benefits................................ 184
Other income............................ 0
Total monthly income.................... 1984

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 400
Management charge (leasehold property).. 0
Council tax............................. 112.23
Electricity............................. 120
Gas..................................... 120
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 40
Mobile phone............................ 0
TV Licence.............................. 10
Satellite/Cable TV...................... 40
Internet Services....................... 40
Groceries etc. ......................... 450
Clothing................................ 75
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 80
Childcare/nursery....................... 0
Other child related expenses............ 150
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 36
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1753.23


Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
provident......................1300......0.........0
HB overpayment.................3548.78...0.........0
Council Tax 1..................964.72....0.........0
EE.............................15.48.....0.........0
BskyB..........................17.25.....0.........0
Virgin.........................179.31....0.........0
Mr Lender......................200.......0.........0
X4L............................226.39....0.........0
O2.............................600.......0.........0
Provident......................745.......0.........0
Vodafone.......................1337.45...0.........0
EE.............................28.56.....0.........0
BskyB..........................107.71....0.........0
Orange.........................112.17....0.........0
Avon...........................165.47....0.........0
X4L............................241.4.....0.........0
Halifax........................448.9.....0.........0
Vodafone.......................593.03....0.........0
Scottish Power.................1487.25...0.........0
Littlewoods (CCJ)..............519.61....0.........0
Studio.........................1300.32...0.........0
Shopacheck.....................1155.59...0.........0
Shop Direct....................686.01....0.........0
Very...........................512.16....0.........0
O2.............................414.16....0.........0
JD Williams....................224.42....0.........0
Council Tax 2..................426.46....0.........0
Total unsecured debts..........17557.6...0.........-


Monthly Budget Summary
Total monthly income.................... 1,984
Expenses (including HP & secured debts). 1,753.23
Available for debt repayments........... 230.77
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 230.77

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,557.6
Net Assets.............................. -17,557.6

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.