Debt is £20700, hoping to qualify for DRO

rosina90

Hi guys,
I hope everyone is well during this pandemic.
I am new to this forum. I would like to ask a simple question. Basically, my debt reached £20,700 now because of the interest piling up. I would have qualified for DRO except that my debt has exceeded. My friend advised me to pay my creditors about £750, so my debt would be £20k and be qualified for DRO. He's willing to lend me £750. Is that a good idea? I don't want to go for bankruptcy, pay £680 fee and be paying some amount for 3 years. My other question is, in bankruptcy, do I lose my emergency fund as well, since they will freeze all bank accounts? I have £830 in my bank. 
Thank you so much for your help.

IrishSean

Hi Rosina; welcome

Have you spoken to any of the free Debt Charities? Are you working at the minute? It might be useful to post up a confidential SOA (statement of affairs); it gives those most knowledgeable about Debt Plans details of your income and outgoings to best advise you. If you click on many of the Debt Free Wannabe pages, especially the diaries you should see a link to the 'lemon fool' site where you can complete the SOA and post up here.the

That's a good question about emergency fund; I know if you file for bankruptcy you can keep essentials / furnishings & a vehicle up to the value of £1000.  I'm assuming the Official Receiver would allow you funds for emergency repairs as well as living costs; don't quote me on that though. (All monies are ment to be made available for creditors). The MSE page 'Debt Solutions' gives a pen picture of what to expect.

 

sourcrates

The £20000 limit is absolute, write and get your creditors to stop interest, your balance must be under 20k on the day your DRO is submitted, after that it dosen`t matter.

You have £800, why not use some of that ? pay a min amount to each creditor and get the balance down, bankrupcy is to severe for that kind of money, set your thoughts on a DRO and do what you can to make it happen.

fatbelly

If your friend pays the debt down the rule is that a third party can do what it wants with its money. If you do it you should treat all creditors equally, so apply the £750 pro-rata to all the creditors.

Your friend cannot lend you £750 as he would then become a creditor and you're back where you started

Are you sure that all the £20700 is qualifying debt?

The following do not count towards the total:

TV licence arrears
social fund debts
child maintenance arrears
magistrate court fines
student loans

You are right that you cango into a DRO with up to £1000 of assets (and a car worth up to £1000)