DRO or DMP?

befree93

Hi guys,

Been lurking for a while but decided it's time to take the plunge and become debt free. I hope this is in the right place but I don't know whether to get a debt management plan or a debt relief order?

I currently owe 11 creditors (unsecured debt) around £20,261 and my monthly income is £1345. My disposable income is about £10 once all my bills and DD's are taken. I've attempted to get a loan to consolidate all the debt but none with decent APR so for the best I'm looking at my options.

No doubt my credit file will take a beating but should I focus at getting my debt below £20k so that I can take out a DRO or should I move to DMP?

Creditors include Barclaycard, Aqua, Capital One and TSB.

Any advise would be great!

WhenIam64

DMP. You don't qualify for a DRO.

If you think that getting it below £20K will qualify you'll need to provide a lot more information about your finances and assets.

sourcrates

Have you included debt repayments in your disposable income ?
I suspect you haven`t, so taking them into account, your actual disposable income, before any credit repayments, would likley be much higher than the £50 limit.

Plus your debt is over the £20.000 threshold anyway, currently.
At present your looking at a DMP.

befree93

Yep, the £10 is after all debts have been paid. I am currently above the £20k threshold but wondering if I can find a way to get below £20k - by initially starting a DMP then switching over (if that’s possible?)

Or, is a DMP the preferred option. Ultimately I’m looking for the best way to become debt free so either option works but it’s about hopefully picking the right option.

WhenIam64

Yep, the £10 is after all debts have been paid.

What is it if you disallow the debt repayments. Technically it is have less than £50 in surplus income per month after paying your household bills and living costs.

befree93

Ahh, that changes things. I’m overdrawn each month but if I use the I&E from SC then I have around £400 left over so probably not eligible!

MovingForwards

Why don't you put up a statement of affairs and we can see if you are underpaying, overpaying, missing something and possibly make suggestions of suitable repayment/debt options?

sourcrates

befree93 wrote: »

Ahh, that changes things. I’m overdrawn each month but if I use the I&E from SC then I have around £400 left over so probably not eligible!

Definitely not eligible, you don’t include debt repayments in your calculations, just normal bills and living costs.

befree93

Thank you for the advise. Not sure on what you meant but here's how things are financially:

Debts
Provider - Balance - Current Monthly Payments
Overdraft - £1,000 - £15
Overdraft - £750 - £15
TSB Credit Card - £3,180 - £100
TSB Personal Loan - £2,872.36 - £132.25
Store Card - £150 - £10
AQUA card - £2,331 - £112.52
Capital One - £1,654 - £51.25
Lendable - £774 - £40.93
Close Brothers - £550 - £18.42
Barclaycard - £7,000 - £152

Total Debts = £20,261 (total) or £647 p/m

Bills p/m
Rent - £410
Gas/Electric and Broadband - £100
NHS - £10.50
Phone Contract - £43
Insurance - £20
Travel - £60

Total bills = £643.50

Which leaves about £50 left over. So what I need to do is lower my monthly payments so that I have more money to live off as currently using the cc's to get by each month which is not really lowering my debt.

Hope the formats okay?

sourcrates

As I said before, you don’t include debt repayments in your calculations .
So you have around £700 left before debt repayments, the limit for a DRO is £50.

So yes, debt management is the way forward.

MovingForwards

You havent accounted for food / clothes etc.

Fill this in, format it for MSE and add it to here so we can have a proper look for you:

http://www.stoozing.com/calculator/soa.php