Debt Relief Order situation help please

Malarky21

Hi all, I live on my own and rent, I have no assets over £1000 and I have a debt of under £20000 so I have been advised that I should do a debt relief order as I only have less than £50 spare after outgoings. Now, to complicate things I have a girlfriend who wants to buy a house with me. Clearly if I do that then I won't be able to do a debt relief order as that will affect my chances of getting a mortgage so I will have to find a way to pay my debt off as well as pay towards a mortgage with her. She may be able to take out a mortgage herself and then I could possibly move in with her. What I want to know is if I go ahead with my debt relief order now and then in for example 6 months time leave my house that I rent and move into her house do I have to declare that she is a partner or can I just say that I have moved house into like a house share and just notify the OR of my change of address and that my total outgoings haven't changed? Hopefully I've explained the situation clearly for you to understand.....

Galloglass

then in for example 6 months time leave my house that I rent and move into her house

Nothing you say is particularly problematic apart from the moving into her house bit. If you suddenly have no rent to pay within the moratorium period, it is highly likely that your spare cash will increase to above £50. 

Your other idea of paying off the debt and saving for a mortgage suggests you have the ability to increase your income. Based on this do you genuinely only have £50 spare. Your calculations may be off somewhere.

How about doing a Statement of Account so we can check your numbers and logic

Malarky21

I won't be saving for a mortgage as I have no spare money to save. She would be putting all the money in to a mortgage, deposit and all. At this moment in time living on my own I have less than £50 spare each month. My options are to either buy a house jointly with her which would create a different amount of outgoings (hopefully less than I have currently) and just try to pay the debt off. Or I do a debt relief order now to clear my debt. I would possibly then once she had bought a house herself move in with her. My question is would I have to tell the person who will be looking at my finances during that 12 month period that I have moved in with a partner or could I just say I've moved in to a house share and assuming my outgoings stay the same as it was when living on my own it will not affect the debt relief order? I will obviously be contributing to her outgoings if i move in like anyone doing a house share would. If that makes sense....

EssexHebridean

If you income is that low it's highly unlikely that any mortgage company will be willing to take a risk on you I'd suggest - they may well insist that the property is purchased by her alone, and that she alone appear on the deeds as registered owner, I'm afraid. 

sourcrates

No one will be looking at your finances during the moratorium period, you are not subject to scrutiny, its up to you to inform the IS of any changes that increase your disposable income above the £50 limit.
If you stay under the £50 surplus, you don`t need to tell anyone anything, if you don`t, you are obliged to tell them, otherwise the penalty for non compliance, can be severe.

Malarky21

I hoped I’d made myself clear. If I do a DRO now then yes she will take the mortgage out alone. We have been approved for a joint mortgage already as although I’ve debt which is increasing I’ve not missed any repayments. 

I was under the impression that if I do a DRO now and move into my partners house in 6 months time that I’d have to inform the IS and that they would monitor my spending throughout the 12 month period I’m under a DRO?

Galloglass

We have been approved for a joint mortgage already

It will be a matter of fact if your disposable income increases above £50 by not having any rent to pay. The problem with your idea is that you will be doubly in the merde if you don't tell the mortgage company about your DRO either. It will be a matter of fact and public record.

The issue is not the DRO itself, it is how you are approaching it. Why not DRO, sit out the 12 months and then become a housemate. Your poor credit record should not be a factor in any mortgage offer. If it is, then I would seriously question the company that is offering it to you.

However if you do a Statement of Account then we'll be able to look at the factual matter rather than speculate. There is the issue of whether you have your spending under control as you have up to £20K in debt. If it is not under control, then you and she can kiss goodbye to the house.

sourcrates

I’ll say it again, you are not monitored at all by anyone during your 12 months in a DRO.
The onus is on you to report any changes to the IS. 

Malarky21

So how does the IS know or find out if someone is lying or not if they don’t monitor at all?

Malarky21

In response to gallowglass, if I do a DRO I won’t be going ahead with a joint mortgage. Likewise if i do a joint mortgage I won’t be taking out a DRO. 

Galloglass

I understand what you are saying and for the sake of balance so the OP can make their decision, this is an explanation of a Debt Relief Restriction Order. All choices are down to an OP.

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/while-a-debt-relief-order-is-in-place/debt-relief-restrictions-orders/