DRO & Divorce Settlement

dd2487

OK, first of all I just want to make clear I know I've really messed up and dealt with this terribly. I am trying my best to sort it now though, please go easy on me! Also I'm on a mobile so apologies for any formatting issues. 

I was married to an emotionally abusive man for 4 years, together for 7. Then 18 months ago I decided to leave as things were getting progressively worse, but unfortunately my dad passed away completely unexpectedly. I took this really badly as we were very close, so my plans to leave my husband were put on hold. I'd saved up some money to leave him but my dad passed away in another country with no insurance so it cost us all a lot in medical bills and getting him home, which depleted my savings. When I had been planning to leave my husband I'd found an apartment I wanted to rent, I was going to do this on my own but after losing dad I just don't think I had the energy to leave my marriage, I had no strength and could barely get out of bed I was so miserable. So I agreed to stay with my husband and he moved to the new place with me, with the tenancy in both of our names. 
One month after moving he was physically abusive towards me. This was the final straw for me so I packed my bags and left with no money and nowhere to go. All I took was a suitcase full of clothes, I left all the furniture and everything we'd accumulated together through our marriage. My dad's death impacted my whole family financially so there was nobody I could turn to, I also couldn't move in with any of my family as they don't live nearby and I had a job. My mum ended up lending me the money that was put aside for my dad's headstone as it couldn't be erected for another three months, so I paid a deposit and first month's rent on a room in a shared house, and purchased basic furniture. I fully expected to be able to pay my mum back within 2 months but then I lost my job. By this point I felt I was losing everything. I had a credit card with a balance of £1200, a loan of £600 and a car on finance but I had never fallen behind on any of the payments until now. 

I spoke to the car finance company and arranged to hand the car back, as there was no way I could keep the payments up now. They said they would sell it at auction and let me know how much I owed, we figured this would be around £5000. I didn't speak to the credit card or the loan company, in all honestly I thought I'd be back on my feet within a month or two and I could just phone them then and pay the difference. I just couldn't face explaining my situation at this time. 

I managed to get a part time job but was still really struggling, so over the next 2 months I took out 2 payday loans. I spiralled further into depression as by now we should have sorted dads headstone and I still couldn't pay the money back. 

Then to make matters worse I found out since I left my husband he hadn't paid the rent on the rented property we lived in, and the tenancy was in both of our names. When I left him his parents promised me that they would make sure he paid the bills on the flat and didn't get me into any debt, as long as I agreed to a divorce without taking any kind of settlement (his parents are very well off and he owns a house which he rents out which I managed for him for our entire marriage). I agreed to this as I didn't want his money I just wanted to be free, but he didn't keep up his end of the bargain.

Suddenly I was being threatened with a CCJ for the rent arrears as they were evicting him. Also he hadn't paid the council tax or electric or water, and they all had me down as living there. He stopped paying his contract phone which was in my name as we had a joint plan, so mine was cut off too. He had met someone else by this point who had a drink problem like him, so had spiralled into alcoholism so badly he didn't care about anything. 

He stopped paying his solicitors so I would email and call repeatedly to find out where the divorce was up to but nobody would get back to me. I had no idea what was going on or when it would be sorted and my credit rating was just getting worse and worse. 

At this point I honestly just couldn't deal with anything anymore, I was also receiving threats from his new partner so was scared to leave my house. For four months I hid away and completely buried my head in the sand, as I'd had to change my phone number to get away from him and none of my creditors knew my new address. 

I decided eventually I have to do something about all this, so I have been looking into a DRO as realistically I'm not in a position to pay anyone right now. I lost my new job due to COVID, I have a temporary job working from home now but I don't know how long it will last and my anxiety is crippling, I wouldn't have the confidence to go back to my old career as things are. So a DRO seems like the best option. 

I also managed to get in touch with my ex's parents and they cleared the rent arrears as they had previously promised the rent would be paid on that property, but they are denying offering to pay any of the other bills. So I have £5000 debt for my car, £1200 credit card and £1400 in loans (plus interest over the last 7 months I've ignored it) as well as possibly council tax, water and electric for his flat. Oh and 2 phone contracts.

As the first email from the solicitor states he agreed I wouldn't come away from this with any debt as long as I didn't contest the divorce, I'm now trying to fight my corner but I can't afford a solicitor. It seems he may be willing to agree to pay me a settlement of £3000, which I would accept just to get this over with.

However, and despite what anyone may think, my absolute priority with this money is my dad's headstone. I would rather go to prison than not be able to pay for the headstone, so £2000 of this is already gone. How will this work with the DRO? Will they allow this?

I am absolutely terrified and don't know where to start as it's all such a mess, but I need to get control of my life again

fatbelly

I think I've got the gist of this.

You have over 10k of debt, little surplus income and no assets. But you are due  a 3k lump sum.

You want to buy a headstone for your dad's grave as the rest of your family can't afford this.

I think this is a question of timing - you can't have a DRO anyway while there is a 3k lump sum in  the picture - and I'm not clear that that car finance debt is finalised yet.

So I think I'd get on with the divorce, make sure you have secure accommodation (deposit? rent in advance?), sort out your Dad's grave if that's what you want to do (Do they really cost £2k?) and then have a look at what the best way is to deal with your debts - maybe posting a statement of affairs here.

I'd be happy to have a look at it then for you

dd2487

Thanks for your response. The headstone situation is quite complicated, I just tried to summarise in my first post. But basically my dad is buried with other family members so we don't have full control over the grave, the existing headstone was very expensive and there's no way for dad's name to be added so my mum agreed she would pay for a new one the same quality as the old, so we can acknowledge that he's there too. It's something that was very important to both of them. My mum had the money put aside but she lent it to me because I had no money to leave my husband after helping pay to get dad home. I can prove that she lent me this money, I expected to pay it back quickly but then lost my job so the old stone is still there without dad's name on which is causing issues between me and my whole family because I borrowed the money that was specifically for the stone.

I don't have any guarantee I will even get a 3k lump sum. My husband ignored the solicitors for almost 6 months, he's co-operating now but if his drinking gets bad again he could just go back to ignoring them. It could take years. I just don't know. And in the mean time my debts are getting worse and I just need to acknowledge with my creditors that I'm not ignoring them, but I don't know what to say because I don't know if I can do the DRO or not.

The secure housing situation is tricky, if I need to move I don't have a deposit and no way of saving one now, unless I did get a 3k settlement and could put the other 1k aside for emergencies. I've gone from having a good credit rating to now not being able to get credit at all, and losing the possibility of financial help from my parents if I was ever struggling. So things have changed very severely and I now have nothing to fall back on.

So it's just overwhelming knowing where to start, if I try and push ahead with the divorce but it takes a year then what happens to my debts in the mean time etc

sourcrates

Not a lot, creditors will run through there standard series of collection letters with you, debt collection takes forever, and can be further curtailed with the right correspondence, don’t worry about that.

es5595

Just a thought, could £2k out of the £3k be paid directly to your mother? Maybe straight from his parents to her? That way it wouldn’t be seen, and couldn’t be considered as a preferential payment. 

fatbelly

Sourcrates is right.

You shouldn't push ahead with a DRO now. If you get a 3k lump sum (or even technically if the sum becomes 'quantified') during the 12-month period, you lose the DRO and can't have another for 6 years

The divorce will also answer the question of whether you have beneficial interest in your ex's property that he owns (something that may make advisers nervous).

You can go into a DRO with 1k of assets (and a car worth up to 1k) so a small emergency fund isn't a problem, and is a good idea.

There does need to be a bit of a gap between spending most of the 3k and entering the DRO, though, unless you've paid ALL your creditors a proportionate amount, which I don't think you're going to do.

ToxtethO'Grady

I would agree with FB and sourcrates - a DRO can be done after the situation with the divorce and your Dad's headstone is resolved.

Your creditors want to know you are getting help from one of the free debt advice agencies so get in contact with National Debtline, Stepchange or Citizens Advice and get a reference number from them. The creditors should give you 30-60 days breathing space around this. The car finance is now a non-priority debt like your loan and credit cards, they have no special powers once you give the car back. They all have to settle with you can afford and it will take months before it will end up as a County Court judgement and that's only if you ignore them.

The one that may cause issues is the council tax - you can ask the council for something called Discretionary Relief due to the situation with your abusive ex-partner - they will outline on their website how you can ask for this. Contact them in writing outlining what has happened and they have to respond in writing. They may write of some or all of it or agree to only chase him for the council tax form when you moved out. The important thing is to stop them obtaining a liability order.

Your debts are very much at the back of the queue and you need to concentrate on yourself and feeling safe. I would suggest contacting a domestic abuse charity such as Refuge but there are others. They can help after you have left, they are not just for you when you are still in the relationship. They will have experience of how to contact different organisations. They may be able to help with signposting to housing providers for people fleeing domestic violence.

Best of luck with everything and we're all here to help if you have any questions about your creditors or debt solutions.

fatbelly

Toxteth - are you talking about Section 13A discretionary relief?

My council does not have this on its website and seems to pretend that it doesn't exist.

Better councils will have e.g. https://www.poole.gov.uk/council-tax/council-tax-payments/problems-paying-your-council-tax/discretionary-discount-under-section-13a-1c-of-the-local-government-finance-act/

but the same principle applies to all councils - you can ask for this, and take it to a valuation tribunal if turned down.

ToxtethO'Grady

Yes FB - it can seem like a closely guarded secret by some councils however they all have to offer it. It's not means tested so it is more situational around health and vulnerablity. You can also raise a complaint with the council in question if turned down, give them 12 weeks to resolve or come to a deadlock, then you can go the the Local Government Ombudsman