Given notice at work can I get a DRO?

Fortuneteller

Due to issues with health I am giving up my job. I currently have a dmp with pay plan. My last salary payment will be on 9th June with holiday pay due then or 4 weeks after.
I have worked out that with my income of tax credit, maintainence and CB after my bills have gone out I will have no spare cash for my dmp. One of my bills is to a secured loan which I will have to continue paying.
My question is is that at what point should I get the DRO applied for. It's complicated as any housing benefit and council tax benefit I will get has not yet been assessed due to my not leaving work just yet. Help please..oh and I have cancelled my dmp dd that is due to leave my account at the end of this month.

National_Debtline

Hi Fortuneteller,


I am afraid you are going to come up against a few obstacles with this. Firstly, you can't be assessed until all of your benefits can at least be estimated. You can try and get an estimate online from a benefit calculator, this is one of many - www.turn2us.org.uk


However, the bigger issue could be your assets. If you are continuing to make payments to a secured loan that would imply you could still be named on a mortgage property or have a beneficial interest in one. If that is the case then I am afraid you are very unlikely to qualify for the DRO because your debt level will either exceed £20k because of the mortgage/ secured loan or you will have equity that exceeds the asset threshold.


It may be worth contacting one of the free debt advice charities for a more detailed look at your situation to discuss your options (or post more details here for help). Good luck,


Laura
@natdebtline

sourcrates

If you have a secured loan, then that implies you own property, so would not qualify for a DRO.

Fortuneteller

The loan is actually a guarantor loan and not secured as I originally said. It is with amigo. Can I continue paying this separately and as an expense?

National_Debtline

Hello again,


Unfortunately, you will not be able to continue with these payments. Whether you are the borrower or the guarantor your liability to this will end with the DRO. If you are the borrower that means the guarantor will become solely liable for the debt and need to pay it and you will not be able to make anymore payments.


Laura
@natdebtline

Fortuneteller

So my best bet is to avoid DRO altogether and just make minimal payments to DMP whilst I'm not working? Like token payments?

National_Debtline

I am afraid that is difficult to say what would be best without knowing the full extent of your circumstances. However, if you do not want the guarantor to become completely responsible for the loan then I am afraid that would eliminate insolvency options.


It would likely rule out a DRO in the 2 years that follow completion of the loan as well. This is because you will have paid this loan in preference to your other debts and that can also be an issue when applying for a DRO.


The best thing to do would be to discuss the full list of options available to you with a free debt charity.


Laura
@natdebtline