Dro.

Hudds303

Hi all. New to the site and trying to help a friend who is drowning in debt.
Quick overview.
Single mum of a 5 Yr old.
Works 16 hrs a week on minimum wage.
Rents house at £450 per month
Has unsecured loan debts of 19k
Has help through benefits with housing and top ups etc.
Outgoings per month are exceeding her income by £500 approx. The tipping point has arrived this month. No more savings to help pay the debts.
Does she contact her loan providers and inform them of the problem, or go for a DRO first.
If you need anymore info to give an informed reply, please ask. Regards. A.

Wannabe2018

Hi.

Having very recently been awarded a DRO, I'd suggest the following:

Visit Stepchange and complete the Debt Remedy tool, which will give you the best options. Mine said bankruptcy, don't worry if this is the case - your friend can call Stepchange and go through things to apply for a DRO.

Stepchange will give your friend a client reference number. She should contact all of her creditors and say she is working with Stepchange and give them this number. Most creditors will freeze accounts for 28 days. This gives a little breathing space to get the application for a DRO submitted. Please note, she does NOT need to tell them it;s a DRO she is applying for, just that she is experiencing some difficulties and working with the Charity (of course, others are available but my experience was with Stepchange).

It might take a few weeks to get everything finalised and submitted, but as long as the creditors know the situation, the majority of them will be fine.

I hope that helps a little!

ToxtethO'Grady

You should check with your friend does that overspend of -£500 include payments to the debts?


Her budget should only be her income, household bills and living expenses to give how much she has available towards debts.

Hudds303

Yes it does include the payments made to loans. This is what she wasn't sure about. So she needs to calculate her total outgoings minus the payments to the loan company's.?.

ToxtethO'Grady

Yes she only should be including payments for living expenses, take away the loan payments what money has she got left or what's her minus then?
The loan payments would not continue through a DRO as the debts would be wiped out, unless they're Social Fund Loans from the DWP.