DRO or debt plan?

What’s better for your credit score in the long run? A DRO or a payment plan with low payments that could take like 3 years to pay off all debts?

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  • boo_starboo_star Forumite
    3.2K Posts
    Part of the Furniture 1,000 Posts
    What’s better for your credit score in the long run? A DRO or a payment plan with low payments that could take like 3 years to pay off all debts?

    A DRO is an official insolvency mechanism and would need to be declared as long as any creditor is asking "Have you ever been insolvent?"

    A DMP isn't.

    You decide.
  • edited 29 November 2019 at 6:54AM
    Willing2LearnWilling2Learn Forumite
    6.3K Posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
    edited 29 November 2019 at 6:54AM
    What’s better for your credit score in the long run? A DRO or a payment plan with low payments that could take like 3 years to pay off all debts?
    Your 'credit score' is irrelevant as lenders neither see it nor use it. Both a DMP and DRO will trash your credit files. A DRO will probably be more toxic than a DMP.

    To apply for a DRO, you must pay £90 to the Insolvency Service and:
    • live in England, Wales or Northern Ireland
    • owe less than £20,000
    • have less than £1,000 in assets (and a car worth no more than £1,000)
    • have less than £50 in surplus income per month after paying your household bills and living costs


    For best advice, guidance and support, we need to see your Statement of Affairs (SOA). This is so that we have the full financial picture. Please complete your SOA, remembering to click on the 'format for MSE' button near the bottom of the form and then paste the whole lot into your thread. :)
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • sourcratessourcrates Forumite
    25.6K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Forumite
    What’s better for your credit score in the long run? A DRO or a payment plan with low payments that could take like 3 years to pay off all debts?

    Hi,

    A debt solution should not be decided soley by the impact it is likley to have on your credit file, any kind of formal/informal debt arrangement will have an impact on your ability to obtain credit for up to 6 years, but once again, thats just a by product of dealing with your situation, clearing the debt is the important part, the rest can be resolved at a later date.

    Debt Relief Orders have specific qualifying criteria, have you checked if you be eligible for one ?

    Why not post your statement of affairs on DFW and more specific advice can be given.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay for a Debt Management Plan.
    For free debt advice, contact either : Stepchange, National Debtline, CitizensAdviceBureaux.
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