Stuck between a rock and a hard place: Bankruptcy vs DRO on UC

JonVarnas

I've been looking at possible solutions for my current debts and have hit a kind of a snag. I have just over £11K in debt (tax credits, credit cards and  utilitities) and I have been on Universal Credit for nearly a year. I don't see my situation improving for the next 12 months at least so was looking to apply for a DRO. However, after filling out my income and expenditure on Stepchange's website they advise that I wouldn't be eligible for a DRO (currently have a spare £20 a month) and they recommend going bankrupt, which is not really feasible as it would take me forever to to raise the £680 fee.

Any suggestions on another course of action?

fatbelly

Why? Why are you disqualified from a DRO?

Not surplus income - it just has to be less than £50 per month

JonVarnas

fatbelly said:

Why? Why are you disqualified from a DRO?

Not surplus income - it just has to be less than £50 per month

That's what confused me. It's kind of a Catch-22 situation: My income from UC is £700 a month and my expenditure is £680 a month. I've included my debts with Tax Credits and DWP advance and they total £40 a month, so my thinking is if I got a DRO then my leftover income would increase to £60 a month which would make me ineligible??

fatbelly

Yes, but that's less than £2.50 a week over the limit. Surely you can find something legitimate to spend your money on?

Do you want to ost a statement of affairs here and I'll comment.

It would be very unusual for someone not working and on a basic benefit to have ANY surplus income.

Then maybe talk to a human at stepchange, or contact CAB

JonVarnas

fatbelly said:

Yes, but that's less than £2.50 a week over the limit. Surely you can find something legitimate to spend your money on?

Do you want to ost a statement of affairs here and I'll comment.

It would be very unusual for someone not working and on a basic benefit to have ANY surplus income.

Then maybe talk to a human at stepchange, or contact CAB

Under normal circumstances definitely but the government raised the Universal credit award by £20 a week in response to Covid and also gave £150 to local authorities to reduce council tax bills which has effectively reduced my council tax to £0. There are things I can think of to bring me back under the limit but because the £90 fee is non-refundable I want to make sure that my Income & Expenditure is watertight just in case.

I'll give Stepchange a bell tomorrow to see what they say.

MovingForwards

You could post your statement of affairs, we can take a look, say where you are not sufficiently budgeting and what would be reasonable. Saves you waiting until tomorrow @JonVarnas

sourcrates

You can easily lose £2.50 a week, thats all you need do, your monthly disposable income, not inc debt repayments, needs to be £50 quid or less, so make it so.

Its an automatic rejection if the numbers are over the threshold, under the threshold you qualify.

Simple maths.

JonVarnas

Well I spoke to someone at Stepchange and with a bit of tinkering managed to get the figures to enable me to go for a DRO. Just got to sign the paperwork and pay the fee and fingers crossed job done. I was just a bit hesitant with my expenditure figures as they don't seem to publish what are acceptable to the OR.

luvchocolate

That's sound good. 
The debt free charities know the trigger amounts for allowances 

fatbelly

We're not allowed to publish the figures. It's  a hanging offence.
Glad you got it sorted.
as I said ' Then maybe talk to a human at stepchange...

greyrainbow

JonVarnas said:

Well I spoke to someone at Stepchange and with a bit of tinkering managed to get the figures to enable me to go for a DRO. Just got to sign the paperwork and pay the fee and fingers crossed job done. I was just a bit hesitant with my expenditure figures as they don't seem to publish what are acceptable to the OR.

Just want to say - good luck!
I am also on benefits just about to submit my paperwork to StepChange for DRO - very scary and stressful overall, can't wait for it to be over. All the best