Queen to Rook takes Knight..

maxmycardagain

I obviously dont play chess but


I know someone who owes £22500 of which £7000 is a CCJ

The DRO maximum qualifying amount is £20,000

Can he haggle with the other debtors to clear the £2501 to avoid a full blown BR?

In BR is a CCJ included? (its a failed lease car hire)

Craig1981

if making payments to bring down debt to under £20k, he would need to make same percentage payments to each creditor as not to favour one over another. if not done correctly, DRO could be rejected based on the fact that one creditor was paid more and considered to be favoured over the others

i believe the CCJ will be included in the DRO as what you have described doesnt fall under any exemptions:
https://www.stepchange.org/debt-info/debts-excluded-from-a-debt-relief-order.aspx

sourcrates

County court judgements are extinguished under insolvency.


But, as said above, he cannot be seen to show preference to any particular creditor, if he can pay down each account equally till the balance drops below 20k, then as long as he meets all the other criteria, he may be ok.

National_Debtline

Hi there,


Whilst the other posts are correct, it does seem illogical to pay back just over £2500 to qualify for a DRO, when bankruptcy would only cost £680. Also, how long would it take to clear enough money to qualify for the DRO? If he was to do this in lump sum settlements, it would likely be questioned where the lump sums had come from. So, although on the surface it seems ok to do this, it may be harder in practice.


Both a DRO and bankruptcy have very similar outcomes so it would be worth looking at why a DRO seems favourable over bankruptcy. Both are damaging to your credit file, and can affect employment, private tenancies and immigration status. In bankruptcy there is a risk of an Income Payment Arrangement if you have more than £20 per month disposable money, and whilst this doesn't exist in a DRO, you do need to report any changes in income during your moratorium and if you have more than £50 per month surplus the DRO can be cancelled and the debts are able to chase you again.


Obviously there are other aspects as well but I think speaking to one of the free debt agencies could help here. Best of luck,


Laura
@natdebtline

maxmycardagain

thanks all, yes, it looks like BR short sharp shock will be best for him

fatbelly

maxmycardagain wrote: »

I obviously dont play chess but


I know someone who owes £22500 of which £7000 is a CCJ

The DRO maximum qualifying amount is £20,000

Can he haggle with the other debtors to clear the £2501 to avoid a full blown BR?

In BR is a CCJ included? (its a failed lease car hire)

Depends what you mean by 'haggle'

There's a poster on the DRO board who is trying to get debts written off to bring him under 20k. That would work but he will need evidence that a debt is actually written off, not just 'agree not to pursue'.

An agreement that the debt is statute barred, or otherwise unenforceable would also work.

Some debts do not count to the total: student loans, criminal fines, child maintenance arrears, social fund loans.

Some debts are not debts: TV licence arrears

Some debts can be halved if with ex-partner: tax credits overpayments.

Under some circumstances hire purchase and logbook loan debts could be excluded.

Some debts go down with time: benefit overpayments with deduction at source; water debts on a Restart scheme.

There are a variety of complaints that you could make that may give some redress and lower the balance. This site is very good source of information on those.

What debts has he got?

maxmycardagain

fatbelly wrote: »

What debts has he got?

Furniture and kitchen appliances on finance

failed car lease (now a CCJ)

HP car repo been told theres £5K to pay


3 credit cards, 2 bank overdrafts, 1 bank loan.

Under some circumstances hire purchase and logbook loan debts could be excluded.

explain please?