Dro advice please

in IVA & DRO
10 replies 2.6K views
I received a entry to county court for one of my unsercured debts last week, I think it was Friday, I have mental health issues and have not paid anything off my debts since around 2013/4, I owe around £11k in total (2 debts with new charges added to the one as entered to court) and I am not paying interest, I have done the soa calculator, I think I am eligible for a DRO, can someone advise? I get really confused with all the terms.
Thank you

Replies

  • Debt relief order (DRO)
    A debt relief order (DRO) is a way to have your debts written off if you have a relatively low level of debt and have few assets. If you qualify, our specialist DRO team can apply to the Insolvency Service for you.

    This solution is only available in England, Wales and Northern Ireland.

    DRO benefits
    A DRO can be a low cost alternative to bankruptcy.
    You don’t pay anything towards your debts for 12 months - and after that they will be written off.
    Your creditors can't contact you for the 12 month period.
    Although a DRO is a formal debt solution you don't need to appear in court
    Risks
    A DRO is only available if you owe less than £20,000 and live in England, Wales or Northern Ireland
    You'll need to pay the Insolvency Service a one-off fee of £90. If you qualify, our specialist DRO team can help you apply.
    You can't apply for a DRO if you're a homeowner.
    A DRO will appear on a public register and will affect your credit history for 6 years
    Is a DRO suitable for me?
    DROs are specifically designed for people with few assets and a relatively low level of debt.
    You may be eligible for a DRO if you live in England, Wales or Northern Ireland, your debt totals less than £20,000, you have less than £1000 in assets (and a car worth no more than £1,000) and have less than £50 left over per month once you’ve paid all of your household costs.
    A DRO can be a cheaper alternative to bankruptcy.

    How does a DRO work?
    A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period then your debts will be written off.
    How much does a DRO cost?
    A DRO will cost £90. This is the amount charged by the Insolvency Service to process a DRO application.
    You can't get any discounts or exemptions like you can with bankruptcy fees, so the full £90 needs to be paid before your application can be submitted.
    The fee can be paid in one lump sum or in instalments over a 6 month period. Once your fee has been paid and your application is submitted you can't get your money back, even if the DRO is rejected or revoked.
  • SOLZSOLZ Forumite
    6 Posts
    Thank you for your reply, how long on average does the process take? What are the sort of reasons that the DRO are refused? Should I inform the court I am looking at this option of not? I am very confused about the court issue, I have tried to look online.
    Kind regards
  • sourcratessourcrates Forumite, Board Guide
    24.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    SOLZ wrote: »
    Thank you for your reply, how long on average does the process take? What are the sort of reasons that the DRO are refused? Should I inform the court I am looking at this option of not? I am very confused about the court issue, I have tried to look online.
    Kind regards

    You need to apply through an intermediary such as CAB or stepchange.
    They go over the application process over the phone, you need to be sure of what you owe, and to who.

    You must have £50 or less left at month end, after all essential payments are made (not inc debts).
    They send you the paperwork, you sign and return it, it's then submitted to the insolvency service.

    If the intermediary has done there job correctly, it will be approved.

    It can take as little as 48 hours to be processed and approved, but can take longer.

    Once approved, if you have a CCJ, the creditor cannot enforce the judgement, after the 12 month monotourium, all your debts are written off.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • SOLZSOLZ Forumite
    6 Posts
    Thank you for your reply and the information, when you say that my monthly amount can't be debts does that include catoluges? I have money that I pay to catalogues but I am not in arrears and dont think I have missed apayment. It is for items that i have ordered recently. I do not want that included in the dro, is it still considered a debt? This is where I get confused.
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
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    Hi Solz

    A catalogue is a type of debt as you get the items on credit. I’m afraid you wouldn’t be able to exclude a catalogue debt from a DRO application.

    The idea would be to make sure you have a realistic budget for the future so you can put aside some money for clothes each month, and then buy clothes when you need to.

    You’re welcome to contact National Debtline for advice if you would like to discuss your options. We have DRO intermediaries here if you decide that you want to apply.

    James
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • sourcratessourcrates Forumite, Board Guide
    24.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    SOLZ wrote: »
    Thank you for your reply and the information, when you say that my monthly amount can't be debts does that include catalogues? I have money that I pay to catalogues but I am not in arrears and dont think I have missed a payment. It is for items that i have ordered recently. I do not want that included in the dro, is it still considered a debt? This is where I get confused.

    It is a debt yes, and you must include all debts you have in a DRO.

    You will not be able to budget a separate payment for the catalogue debt, instead you should allow for clothes or whatever it is you buy from it, in your budget, and buy them somewhere cheaper, as catalogue prices are high anyway.

    Edit : cross posted with James.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • SOLZSOLZ Forumite
    6 Posts
    FYI I CANNOT buy my clothes and shoes from the highstreet as they do not stock my sizes for the amounts I can afford (if they stock my size at all). That is why I have to buy online. I have to "bulk buy" as they run out of stock and my sizes very quickly. I am disabled.
  • SOLZSOLZ Forumite
    6 Posts
    ANother query I have is about using the laundrette, my washing machine broke last year and I have been unable to buy another, I currently do a wash and dry a twice week @ £7 each (in the summer it will be £5 as I can put it on the line outside) so that works out at around £60 a month!!! Which has really shocked me, but I need to wash my clothes! Is that allowed as an expence on my household expenses? Like I said it is all very confusing. I have rung my local CAB and hopefully they will ring me back tomorrow with an appointment.
  • sourcratessourcrates Forumite, Board Guide
    24.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    ✭✭✭✭✭
    SOLZ wrote: »
    ANother query I have is about using the laundrette, my washing machine broke last year and I have been unable to buy another, I currently do a wash and dry a twice week @ £7 each (in the summer it will be £5 as I can put it on the line outside) so that works out at around £60 a month!!! Which has really shocked me, but I need to wash my clothes! Is that allowed as an expence on my household expenses? Like I said it is all very confusing. I have rung my local CAB and hopefully they will ring me back tomorrow with an appointment.

    Hi,

    Your budget, is just that, your budget.

    You list anything you spend money on, it's that simple.

    I too have to buy stuff online as I can't get shoes to fit locally, but they are available without having to have an account.

    With a DRO they will tell you all your debts must be included.

    That's the criteria I'm afraid.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
    Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to:
    [email protected].
    Any views expressed are mine and not the official line of MoneySavingExpert.com.
    "I don`t trust Bankers, I don`t trust Banks, and I don`t trust you.........Private Frazer".
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
  • SOLZSOLZ Forumite
    6 Posts
    Thank you for replying, I hope that the cab can help me, it has been difficult lately with issues with a neighbour. :(
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