Bankruptcy or wait to see if DRO limit increases

lz505

Hi, I’ve been reading the forum for advice for a long while now. I have debts of around £28,000 , rent my home and had set up a DMP which I have now had to stop due to a significant change in income. Stepchange have given me lots of advice ( I haven’t yet sought help for this). I have been since December 2020 preparing to go bankrupt, stepchange contacted my creditors and let them know that I wouldn’t be paying January and I haven’t paid February either. My plan was to apply for bankruptcy  this week . However a spanner has been thrown in the works as I have seen that there are proposals to raise the DRO threshold to  £30,000. My mental health has really been affected and I’m tempted to just apply for bankruptcy ( I have the fee as have been helped with this) . I wonder what people’s thoughts are ? I guess my worry would be that now I have defaulted on the DMP that my debts will be accruing more interest but I’ve probably been burying my head in the sand a bit over this. Also the proposal may not be agreed - my head hurts ! 

Thanks in advance ( btw - I did try to do a search but really struggle to use the search thing successfully) 

sourcrates

Both bankruptcy and DRO’s are usually granted without any creditor intervention, the DRO threshold is rising to 30k in May I believe.
I wouldn’t worry too much about your creditors, debt collection has various stages, and takes years in some cases, and your not even at the beginning of it yet.

Would you meet the requirements for a DRO when the limit is raised ?

The disposable income limit is also rising to £100 up from £50.

fatbelly

Do you meet the other criteria for a Debt Relief Order?

I've posted elsewhere that it's 'almost certain' to be going up to 30k limit on 5 May.

If that's not happening it's because of a problem with the breathing space system that is due to  come in on the same day. I work in that field so will be posting here as soon as I hear anything.

I don't think there's much downside to just hanging on as I doubt any interest (which should be mostly stopped as you have been on a dmp) would take you over 30k

If it works then you just pay £90 and the remaining £590 is a nice buffer as you go into the  DRO (current limit £1k, due to be going up to 2k)

lz505

Thankyou both for your replies- yes I believe I meet all the other criteria- I will have a good read through again to make sure. I guess that seems like the sensible thing to do then- if all else fails then the bankruptcy option can still be applied for then. Just need to find a way of dealing with my worrying head 😂

fatbelly

lz505 said:

Thankyou both for your replies- yes I believe I meet all the other criteria- I will have a good read through again to make sure. I guess that seems like the sensible thing to do then- if all else fails then the bankruptcy option can still be applied for then. Just need to find a way of dealing with my worrying head 😂

That seems sensible. There's nothing to worry about as you have a plan A and a Plan B

Ivabr89

I am in exactly the same position I think I'm going to hold out till may