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DRO - wait until limit increases? What to do in meantime?
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ASCMAYTREE30
Posts: 4 Newbie

in IVA & DRO
Hi there! Just after a bit of advice please. I have been looking in to getting a DRO however my debts fall just above the £20k threshold (£23k). I had heard that the limit may be increasing soon but there has been a bit of a delay.
I have been paying my minimum monthly payments albeit seriously struggling and to be honest should have looked at reducing payments/contacting the creditors a long time ago. I am at the point now of borrowing money etc. from family just to pay my priority payments each month which is not a long term solution. Would I be better off contacting my creditors to explain that I am going through financial difficulty and asking them to put a hold on my account/s for 30 days? I'm not sure if I should do this myself or go through Stepchange. My worry is that because I am over the 20k threshold obviously Stepchange can't advise a DRO so will recommend I go on a DMP or make token payments.
Thank you in advance.
I have been paying my minimum monthly payments albeit seriously struggling and to be honest should have looked at reducing payments/contacting the creditors a long time ago. I am at the point now of borrowing money etc. from family just to pay my priority payments each month which is not a long term solution. Would I be better off contacting my creditors to explain that I am going through financial difficulty and asking them to put a hold on my account/s for 30 days? I'm not sure if I should do this myself or go through Stepchange. My worry is that because I am over the 20k threshold obviously Stepchange can't advise a DRO so will recommend I go on a DMP or make token payments.
Thank you in advance.
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Comments
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You don`t have to do anything in a hurry, the collections process a creditor uses can take quite a while, many months of letters, calls etc.
Then if passed to a debt collector, they use a similar formula, they run through there series of collection letters, try to phone you etc etc, again, this goes on for anywhere up to a year possibly, so you are under no pressure here to do anything yet, contrary to popular belief, the collection process can take many months or even years in some cases.
The threshold will be raised in due course, you can of course write and explain your situation, but if your going to take the insolvency route it matters little what you tell your creditors now does it.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter2 -
This might be a good case for token offers on the non-priorities. There's a standard letter on National Debtline.
Please stop 'borrowing' from family - you are not going to be allowed to repay them in insolvency. If you want to do a statement of affairs we can help more
https://www.lemonfool.co.uk/financecalculators/soa.php
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You could still phone Stepchange (0800 138 1111) to talk things through. I used them a few years ago and they advised me to get a DRO as my debt was below the £20k level.
BUT they do have other solutions and if you do not like them you can just say 'no'. I found it really helpful to have them advising and working on my behalf - if you submit a DRO through them apparently it has more chance of success (is what I was told, I don't know if it's true so don't quote me on that). I don't know about you but when I was in a terrible financial mess I just could not think straight and worried all the time.
I found just talking to my allocated adviser at Stepchange really helpful - they are friendly, helpful, knowledgeable and most important of all, non-judgemental.
It's a free phone call and it's all very confidential. You can talk, listen and if you don't want to take their advice you don't have to. There's no commitment at all.
Why not just give it a try? Borrowing from family just leads to disaster. There IS a way out, you can start by contacting the people who can definitely help you.
Good luck.Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.1 -
MalMonroe said:if you submit a DRO through them apparently it has more chance of success (is what I was told, I don't know if it's true so don't quote me on that).
Your advisor goes through everything with you, and only when things are all fully finalised, is the application sent.
Its not a question of success or failure, if you meet the basic criteria, and don`t have any skeletons in the closet, you are approved.
Normally if an application were expected to fail, it would not be sent.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter3 -
ASCMAYTREE30 said:My worry is that because I am over the 20k threshold obviously Stepchange can't advise a DRO so will recommend I go on a DMP or make token payments.
But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll1 -
ASCMAYTREE30 said:Hi there! Just after a bit of advice please. I have been looking in to getting a DRO however my debts fall just above the £20k threshold (£23k). I had heard that the limit may be increasing soon but there has been a bit of a delay.
I have been paying my minimum monthly payments albeit seriously struggling and to be honest should have looked at reducing payments/contacting the creditors a long time ago. I am at the point now of borrowing money etc. from family just to pay my priority payments each month which is not a long term solution. Would I be better off contacting my creditors to explain that I am going through financial difficulty and asking them to put a hold on my account/s for 30 days? I'm not sure if I should do this myself or go through Stepchange. My worry is that because I am over the 20k threshold obviously Stepchange can't advise a DRO so will recommend I go on a DMP or make token payments.
Thank you in advance.0 -
danjackson2021 said:Do we know yet what the limit will increase to and when
If anyone spots it, flag it up on this board!0 -
If you're serious about a DRO then I wouldn't bother making payments to your creditors at all as the DRO will knacker your credit record anyway so you are basically throwing away money. Use the money you would have paid them to
- Pay back your relatives
- Build up an emergency fund
- Replace any items that are getting old because you won't be getting any credit for a while.
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If you are paying back your relatives then this would be seen as a preferential payment in which case a DRO may be refused, so I'd advise not to pay back any creditors, or at least say you haven't made any preferential payments.
I'm not sure how much is checked as to transferring money/withdrawing money to pay relatives as my DRO was straightforward
Just something to keep in mind
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I had 23k of debt I didn't know how much St the time I started talking to step change to get the ball rolling I called lowell as they had sent me a few letters the other collectors hadn't so I called lowell up and I was just honest with them had depression and so on was trying to do a dro and as a good will gesture to me they wiped everything I owed them that then dropped me below the 20k threshold and had to wait 3 months as step change suggested because of the preferntal payment and also had to send step change the letters I received from lowell saying I Don owe them no money for the debt my dro got accepted 4th November 2019 I'm now debt free3
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