DRO & CCJ's

king16
king16 Posts: 12 Forumite
Just wanted to post after reading a few other threads about DRO's..

My husband was hoping to apply for a DRO as his debts are under the amount, no assets or savings over £1000 and his car is not worth over £1000, we dont own our own home either..

He has seeked help from StepChange and filled out their form online.. from that it says his surplus is £26 a month but because he pays £64 to 3x CCJ's a month currently they have said that would become surplus if he stopped paying them due to a DRO so said he isn't able to apply for a DRO. but advised an IVA with £80 a month payment or BANKRUPTCY. Each month he struggles with his bills but pays the CCJ's first so he doesnt get into any more bother but then struggles with other bills

So he has filled out the debt remedy form on their website but hasn't decided on what to do yet so he can still amend the debt remedy, what should he alter or say to StepChange to get the DRO process started?

Thanks

Comments

  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi king16


    Stepchange are right to point out that the existing CCJ payments have to be disregarded when working out your husband's budget for DRO purposes.


    Whether it is the DRO, IVA or bankruptcy route that he ultimately goes down, those CCJs will not get any special treatment or be exempt in any way.


    I haven't seen his budget so can't comment on how realistic or sustainable it looks. All I would say is that if he is finding it hard to meet basic bills each month then he needs to urgently review these CCJ payments as they should not rank above paying essentials like rent, food etc. Are there any one-off expenses (birthdays, Christmas etc.) or general emergency funds factored into his budget so far?


    He can potentially reduce his CCJ payments either by informal arrangement with his creditors or, if they are not cooperative, by an application to the court for "variation":


    https://www.nationaldebtline.org/EW/factsheets/Pages/varyingpaymentsonaccj/instalmentsonaccj.aspx


    There may be a fee to pay for this, however, so it is worth looking at the informal approach first. The likelihood is that any enforcement powers available to these creditors are fairly limited, so there may not be as much "bother" as feared.


    He can always seek a second opinion from another DRO provider:


    https://www.gov.uk/government/publications/getting-a-debt-relief-order/getting-a-debt-relief-order


    Dennis
    @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
  • king16
    king16 Posts: 12 Forumite
    Thank you so much for taking the time to reply in such detail also. he has just spoken with Step Change again and give them realistic amounts for his outgoings, which they have recalculated his surplus and has said he is in the minus but with the CCJ factored in for a DRO it would take his surplus to £23 so they have advised him to apply for a DRO now.

    They are sending him out the application pack...

    Should he ring the creditors with the CCJ's to let them know he is applying for a DRO and cancel the direct debit with them or ask them to lower the payment (which is due to be taken on 1st every month) or should he leave his payment arrangement in place until he gets the decision from the DRO application?
    If he was able to cancel the payments as of today he would be able to afford to pay the £90 fee at the end of this month.
  • sourcrates
    sourcrates Posts: 31,007 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    Just get on with applying for the DRO, cancel the payments.

    The debts with the CCJ's will be frozen from any further action once the DRO is approved effectively making them irrelivent.

    At the end of the 12 months all his debts will be written off, sooner you get the paperwork in, sooner you get piece of mind.
    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
  • king16
    king16 Posts: 12 Forumite
    edited 16 May 2017 at 12:12PM
    Thanks, so should he cancel the direct debits to the CCJs? should he speak with them to let them know he is doing this and ask them to place any further action on hold?

    If he cancels them he can pay the fee on 1st June and put the application through.. if he doesn't cancel them it will take him a little longer to save the fee? so makes sense to cancel them and get the DRO processed faster but not sure if this is advisable ?
  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    Tenth Anniversary 1,000 Posts Combo Breaker
    Hi again

    king16 wrote: »
    Thanks, so should he cancel the direct debits to the CCJs? should he speak with them to let them know he is doing this and ask them to place any further action on hold?

    If he cancels them he can pay the fee on 1st June and put the application through.. if he doesn't cancel them it will take him a little longer to save the fee? so makes sense to cancel them and get the DRO processed faster but not sure if this is advisable ?


    I agree with sourcrates here - cancel the payments and get the £90 saved up all the more quickly. He can ask them or not ask them to put further action on hold - I don't know that it will make a great deal of difference.


    If doing this puts him in a position to submit his DRO application by 1 June then realistically there is nothing those creditors can do in the meantime.


    Dennis
    @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
  • king16
    king16 Posts: 12 Forumite
    Thanks everyone for your help! hopefully the application pack will come asap, he has all the things he needs ready to send in with his application.
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