DRO and small increase in income - hypothetical question

edited 30 November -1 at 1:00AM in IVA & DRO
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1977dave1977dave Forumite
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edited 30 November -1 at 1:00AM in IVA & DRO
Hi everyone, I was hoping someone could advise

I've not worked for most of this year due to getting sacked from a job I was bullied in, I've spent most of the year recovering from a breakdown, a broken back and arthrtitis in my spine...well and truly broken in all senses and in debt.

I'm applying for a DRO, but want to get back to work soon, part time initially so I can get back to normality and also to concentrate on my health and build up my strength

Currently my debts are £13,000 and I have no spare income, all my basic costs are covered and thats it

If I went back to work part time, would a DRO be revoked, if I had say between £60 to £80 spare income after bills are paid, would the DRO be revoked, given the size of my debts and the small increase over £50 spare income wouldn't be enough to clear my debts in a reasonable time.

I want to go to work part time just to get back into work and then go full time eventually after a year or so, given the bumps in the road with my health I don't want to run before I can walk

Any advice would be appreciated

Replies

  • edited 22 December 2019 at 7:41PM
    fatbellyfatbelly Forumite
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    edited 22 December 2019 at 7:41PM
    While you're in the moratorium you are expected to declare any changes of circumstance.

    My advice (and I think this is key for you) would be to start your DRO by declaring a negative financial statement, saying that you are being propped up by friends and relatives. You're probably on Universal Credit so that is likely to be true anyway.

    When you get a part-time job your UC will decrease and your expenses (travel costs, food at work) increase. As long as the result does not take you over +£50 the moratorium continues.

    To answer your question directly if your surplus income is over £50 per month during the 12 month moratorium the DRO has to be revoked. There is no flexibility even if this would lead to a dmp taking 260 months. The insolvency service would probably expect you then to go for bankruptcy.

    If you're definitely going to be a lot better off at some point in the next 12 months, bankruptcy might be more suited to you. Or token offers until you can afford a dmp.
  • edited 22 December 2019 at 8:18PM
    1977dave1977dave Forumite
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    edited 22 December 2019 at 8:18PM
    Thank you

    Yes I'm on Universal Credit and get £650 per month and my outgoings are £700 a month and I'm making up the difference with savings, but with only £50 left to cover January's short fall I've then got nothing left

    I currently spend £140 per month on food, so when I start working again my food bill will go up, because I'll be making my own lunches rather than buying out, so I guess that'll be ok as it's cheaper to buy lunch ingredients than go to a sandwich shop.

    I don't pay for transport at the moment and even when I was working, I walked, so I guess I could start getting the bus, especially when it's snowy and icy as I'm at increased risk of fractures with the osteoporosis, even more so with the ice...I broke my back slipping on a wet leaf!

    I forgot that I'll probably have to pay full council tax, so my disposable income may not be as much and might not take me over the £50

    Another couple of questions, I've got osteoporosis, osteoarthritis in my spine and pay £23 a month for a gym membership to help my recovery/manage my symptoms

    Would this be allowed, I don't drink, smoke, have haircuts (bald as a coot) and going to the gym is my only real interest as I don't socialise, since the tough times started my friends disappeared, so now i'm just looking out for myself

    With a DRO, do I have to send in bank statements, or hand over control of my bank account, as I'm just concerned if the gym membership is listed it might be seen as unneccessary spending

    Many thanks once again
  • fatbellyfatbelly Forumite
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    Personally I'd allow the gym membership - also something for Christmas/birthdays.

    You make a good point about council tax.

    You could have started a DRO before your savings ran out - remember you can have up to £1000 in assets as well as a car worth up to £1000.

    Don't hesitate to put forward a financial statement showing negative £50 - that's clearly the truth.

    As for food & housekeeping I would say £35 per week (that's a little more than £140 per month) is the bare minimum - and you need something for clothing, and extra in there if you have pets.

    I can't believe you never pay for travel. That would need something in that section.

    Your intermediary will need to see proof of your income, but that's as far as it goes. There is no routine checking once you are in the DRO.
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