DRO - circumstances change

sallymanton · 7 July 2020 at 10:02PM

Hiya all
I'm doing some research in to a DRO, which I may go down this route, rather than bankruptcy just not sure.I read it says after the 12 months 'if your circumstances change' then debt will be written off, well if I went ahead and applied for this, then my monthly payment to stepchange will stop (currently on a DMP) so therefore I'm instantly better off. Would that mean I would have to contribute to my debt again, even if my monthly income stays the same at time of application? I'm so confused please help.

sourcrates · 7 July 2020 at 10:15PM

Hi,
Yes you are confused.
To qualify for a DRO you must ~

(A) not be a homeowner
(B) have 20k of debt or less
(C) not have a car or assets worth more than £1000
(D) not have more than £50 disposable income, not including debt repayments.

Basically if your paying stepchange more than £50 a month, you won’t qualify for a DRO.

In a DRO you make no payments, then after 12 months, if your circumstances have not changed, your debts will be written off.

sallymanton · 7 July 2020 at 10:21PM

Thank you, that's the bit that confused me, is the if my circumstances haven't changed my debt will be written off...
I do quality for a DRO, based on everything you have said , just didn't know what would happen to the money I pay stepchange at the moment. 🤔🤔

fatbelly · 7 July 2020 at 11:39PM

There's a £90 upfront fee then that's it. No further payments. If you have surplus income (less than £50 per month) then save it - you are allowed up to £1000 'assets' on entry to a DRO and the rule is a bit looser once you are in it (but best to keep it below £1000)