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

JonVarnas

greyrainbow said:

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

Same to you. Wish I had just started much sooner. Filed my paperwork with them over two weeks ago and still have heard nothing from Stepchange, though I do know they've checked my credit file (well Equifax at least). Still have to pay the fee and then wait for the OR to do their thing, so it's looking like weeks of anxious waiting.

I bet they won't backdate the start of the DRO to the date of the application either.

CocoM2020

No they don’t backdate it - does it make a difference? Mine took 6 months from contacting Stepchange to it going through - your waiting times are much much shorter. 

JonVarnas

CocoM2020 said:

No they don’t backdate it - does it make a difference? Mine took 6 months from contacting Stepchange to it going through - your waiting times are much much shorter. 

Blimey, lady on the phone at Stepchange said 4-6 weeks

JonVarnas

Me again,

One of my debts included in my DRO was my water arrears but I'm due another bill in the next week or so. Will this new bill be also part of my DRO debt or a new separate debt?

fatbelly

JonVarnas said:

Me again,

One of my debts included in my DRO was my water arrears but I'm due another bill in the next week or so. Will this new bill be also part of my DRO debt or a new separate debt?

Your water authority should be  writing to you with a new account reference, starting again with zero balance.

If you are still billed on a rateable value basis, it could be more complicated but most people are on meters these days

JonVarnas

fatbelly said:

JonVarnas said:

Me again,

One of my debts included in my DRO was my water arrears but I'm due another bill in the next week or so. Will this new bill be also part of my DRO debt or a new separate debt?

Your water authority should be  writing to you with a new account reference, starting again with zero balance.

If you are still billed on a rateable value basis, it could be more complicated but most people are on meters these days

Thanks for the response. Yes I am on  a meter.

The thing is that my DRO hasn't been approved yet. I'm still waiting for details from StepChange to pay the fee, so this process is going to go on for a while and I don't really know how to handle the water company. In my present situation I can only make payments by installments, but if they include my present arrears in any installment plan, wouldn't that mean that I'm essentially making them a preferred creditor by paying them anything?

fatbelly

Yes, don't pay anything and put the actual balance owed in your DRO.

MinuteNoodles

JonVarnas said:

 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?

Go bankrupt. Some of the £680 fee will be waived because you're on low income. You raise the rest by not paying your bills, WITH THE EXCEPTION OF RENT/MORTGAGE, and saving up that money. Once you've made the decision you're going bankrupt any bills you do pay, including council tax, you're just setting fire to that money.

JonVarnas

MinuteNoodles said:

JonVarnas said:

 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?

Go bankrupt. Some of the £680 fee will be waived because you're on low income. You raise the rest by not paying your bills, WITH THE EXCEPTION OF RENT/MORTGAGE, and saving up that money. Once you've made the decision you're going bankrupt any bills you do pay, including council tax, you're just setting fire to that money.

Well I would if I could, but I'm on Universal Credit and even if I did stop paying my bills it would take months to save up the fee, and I don't think they waive the fee for low incomes anymore.

Anyway, it's moot because I got my DRO application in the post and all I have to is pay the £90 fee and on I go. Also, because of covid, I can pay the fee via online banking instead of having to trundle to a post office/payzone. I still have another five working days wait after paying until I can contact Stepchange again, so next stage will be a week on Monday. Slowly getting there

fatbelly

Jon is correct - there is no remission of the fee in bankruptcy (or DRO for that matter) because it is not a court fee now.