DRO question

cornish_donkey

Hi my husband no longer works due to illness and is waiting for his ESA claim to go through. We have spoken to stepchange and they advised he gets a DRO for his debts. As my husband is the one getting the DRO they have asked for his proof of income i.e his benefit letter so as soon as he gets his award letter we will get the ball rolling. As all the other benefits (DLA, CA, CB, CTC) are in my name will they want my award letters too?

Also when stepchange put him forward for a DRO what information will the OR need and will they need to see/speak to him? He has anxiety so is not good on the phone.

One last question if my hubby then gets PIP would it make a difference to the DRO?

Tia

sourcrates

Hi,

A DRO is unique to the individual, just his income will be assessed.

He must have £50 or less left at month end, not including debt repayments.

The entire process is done via an application form you send back to stepchange, he may need to speak to them on the phone to iron out anything that may need attention, but normally your written answers are sufficient, the application won’t be submitted unless the intermediary is 100% satisfied with it.

That way it will be approved straight away.

cornish_donkey

Thank you for your reply. Stepchange took into account on the budgeting form all money coming into the house which is why I thought they may want my info too.

fatbelly

His income is his income so that side is pretty clear - if he gets PIP that is disregarded, as is DLA.

But your income is relevant when they have to work out his share of the household expenses.

Then they can do the sums and show his income minus his share of the expenses < £50 per month

It's an automated process once it's submitted and the DRO Team rarely make contact with the clients - it's not like bankruptcy in that regard.

cornish_donkey

Hi I have another question...Stepchange have worked out that our combined surplus (deficit) is -£73 but further down the letter it say -£36.00 I take it the latter figure is my husbands sole surplus deficit?

Also my husband has just got a copy of his credit file as requested by Stepchange to prove his debts. He didn’t expect to see his o2 contract of £560 on there which brings him a little over the 20,000 limit.
Would Stepchange allow a family member to pay that so it brings below £20,000. He is also worried about how long it takes the DRO to go through in case his credit cards start charging for missed payments.

Ty for taking the time to help us x

fatbelly

Yes, it sounds like they're splitting things 50:50

If that O2 contract is a current contract it does not have to be included though, to be safe, your intermediary should add a note too explain this when they submit the application.

As said before, it's an automated process and if the DRO team's computer sees over 20k on an Experian report it may automatically reject the application.

If he wants the O2 debt to go in, and the value of that debt is actually £560, and that takes him over 20k (there are three if's there) then a third party can make a payment as they are not bound by the preferential payment rule.

cornish_donkey

Thank you, he’d rather try and keep the contract. Stepchange calculated his contract in the budget so I’d better phone them to clarify what’s going on.