DRO & CCJ's

king16

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

National_Debtline

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

king16

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

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.

king16

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

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

king16

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.