DRO and Loans just Before an Application

Hello,

Just a quick few questions regarding DROs.

My friend is currently looking to apply for a DRO through one of the authorised organisations. The issue is, the lions share of the particularly concerning debts is from Brighthouse. He has a television, laptop and washing machine from there.

As he is out of work through ill health and currently on welfare benefits without any savings, he will be stuck for replacing these items with not particularly supportive family and he is otherwise rather socially isolated.

My friend has not yet applied for a DRO but he is in final talks about going ahead with it.

It's not the most pretty situation I can appreciate but i'd hope that readers would be kind enough not to flame the question:

If my friend is to apply for a loan to pay for replacing the items and is then to declare that loan in the DRO, I would suspect that would be breaking the rules somewhere but would it?? I'm not talking about taking the mick but to get him the items he needs. With his mental health problems, his laptop and television are a lifeline when he can't otherwise get out of the door - I appreciate in some cases, these might otherwise be considered a luxury.

Thanks in advance for kind or impartial responses :-)

Barney.

Comments

  • wba31
    wba31 Posts: 2,189 Forumite
    barney142 wrote: »
    Hello,

    Just a quick few questions regarding DROs.

    My friend is currently looking to apply for a DRO through one of the authorised organisations. The issue is, the lions share of the particularly concerning debts is from Brighthouse. He has a television, laptop and washing machine from there.

    As he is out of work through ill health and currently on welfare benefits without any savings, he will be stuck for replacing these items with not particularly supportive family and he is otherwise rather socially isolated.

    My friend has not yet applied for a DRO but he is in final talks about going ahead with it.

    It's not the most pretty situation I can appreciate but i'd hope that readers would be kind enough not to flame the question:

    If my friend is to apply for a loan to pay for replacing the items and is then to declare that loan in the DRO, I would suspect that would be breaking the rules somewhere but would it?? I'm not talking about taking the mick but to get him the items he needs. With his mental health problems, his laptop and television are a lifeline when he can't otherwise get out of the door - I appreciate in some cases, these might otherwise be considered a luxury.

    Thanks in advance for kind or impartial responses :-)

    Barney.

    If your friend does nothing and proceeds with the DRO, depending on how long is left on his agreements he may be able to list the items as excluded debts, and continue to repay them anyway.
    Taking out another loan to pay off the Brighthouse HP agreements and then proceeding with a DRO would be borrowing with no reasonable intention to repay, and if not spotted by the intermediary could be the cause of an objection by the lender to their inclusion in a DRO.

    The reason i raise how long is left on the agreement depends on the intermediary completing the DRO. Say your friend is paying £15 per week on an item, and it finishes in 10 months, some intermediaries will say that in 10 months that would be seen as a surplus (providing there isnt a deficit in the first place) and the DRO Unit could revoke the DRO for having over £50 surplus at that point. Reality is that for someone on benefits the money will go back into the household budget, but it's just something to think about. If over 12 months left on all agreements its not an issue, but the intermediary should manage that situation if necessary
  • sourcrates
    sourcrates Posts: 28,717
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    edited 8 May 2017 at 3:01PM
    Certainly do not take out any more loans as this will result in a refusal of his DRO application.

    He may have to make a difficult choice between been debt free, or keeping his tv and laptop.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • National_Debtline
    National_Debtline Posts: 7,998
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    Hi barney142 and welcome to MSE,


    For the washing machine and any other white goods he could consider applying to a trust fund to get these replaces. Places like the British Gas, EDF and Eon all have trust funds to help replace essential white goods which may help.


    Unfortunately, the TV and laptop will be trickier to deal with, as they won't be classed as an essential item, that a charity may help him replace. Although they may be able to be excluded from the DRO (as an essential item), he would then still have to maintain the weekly payment. So, the question would then be - is the DRO worth doing? If the majority of debt is BrightHouse he really needs to include the debts in the DRO to save him the weekly payments. If he were to return these goods he could look at how much it may cost to save up and buy something similar second hand. Good luck,


    Laura
    @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
  • Former_E.ON_Company_Representative:_Malc
    Former_E.ON_Company_Representative:_Malc Posts: 6,558
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    Hi barney142 and welcome to MSE,


    For the washing machine and any other white goods he could consider applying to a trust fund to get these replaces. Places like the British Gas, EDF and Eon all have trust funds to help replace essential white goods which may help.


    Unfortunately, the TV and laptop will be trickier to deal with, as they won't be classed as an essential item, that a charity may help him replace. Although they may be able to be excluded from the DRO (as an essential item), he would then still have to maintain the weekly payment. So, the question would then be - is the DRO worth doing? If the majority of debt is BrightHouse he really needs to include the debts in the DRO to save him the weekly payments. If he were to return these goods he could look at how much it may cost to save up and buy something similar second hand. Good luck,


    Laura
    @natdebtline

    Spot on Laura. The E.ON Energy Fund might be able to help with replacing essential white goods like cookers, fridges or freezers as well as helping to repair or replace gas boilers. The fund might also be able to help with energy bill arrears with both a current or former supplier.

    People don't need to be an E.ON customer. The E.ON Energy Fund has been set up to help customers of any energy company who are struggling with their bills. There's more information on our website including what's needed to qualify and an application form.

    Hope this is of interest.

    Malc
    Official Company Representative
    I am an official company representative of E.ON. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
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