DRO advice

LottieLoo

Hi

Long story short I'm in alot of debt, I qualify for a DRO which I plan to apply for in March - or sooner if I can get money together.

I'm due a large back payment from Universal Credit and had planned to pay my mum back a personal loan she made to me (before the DRO was considered) and clearing one of my debts but now I'm concerned if this is breaking the rules?

Any advice please

023456789

What sort of debt is the one you are planning on paying back over all the others?

LottieLoo

It's just one I know the back payment will clear. There will still be other debts left over, around £10000

023456789

Sorry just for clarification is the debt you want to clear relating to your current utility supplier / council tax / rent or mortgage? Basically anything that would affect your ability to live and look after yourself?

LottieLoo

No it's a HP debt. It's the smallest debt I have so I would be able clear it.

My main concern is paying my mum back, will the decision maker for the DRO reject my application as I choose to pay her back rather than one of my other 'official' debts?

fatbelly

You are discussing 'preferential payment' and are expected to declare these . Yes, your application may be declined. The guidance says this

A DRO application could be affected if, within 2 years of the DRO application, the debtor has made payments to one or more creditors in preference to other creditors. It is not possible to state precisely what might fall into this category, as any preference will depend on the facts and determined on a case by case basis.

In reaching a decision on whether to approve or decline a DRO application, the Official Receiver will have to consider the amount of the payment, whether it would have altered the financial position had it not happened, consider the timing and the reason behind the payment.

maxmycardagain

fatbelly wrote: »

You are discussing 'preferential payment' and are expected to declare these

get a 3rd party to pay it off and stay within the rules

[Deleted User]

Whilst sometime ago and through a private debt management company who were an intermediary at the time, I paid off a small capital one card balance in the April 2012 and managed to repay 5 of 6 payday loans in the year leading up to the time when had a DRO approved in July 2012 after my circs changed. Nobody is advised to pay £90 or whatever the fee is now really on a whim.