Mortgage after DRO, am I right in this?

James-may

Can I just check something please...
I had a dro 6 years ago, so it has now dropped off all my files that I can find.
When I originally got the dro it was billed as a mini bankruptcy, however now I'm looking into it, it seems that legaly it's a different thing.
I couldnt find my name in the London gazzette, do dug into it a bit and realised from what I'm reading a dro is not bankruptcy.
Ive never had any ccjs or IVA in place, only a dmp before the dro was in place.

So does that mean that when applying for a mortgage and it asks, have you ever been declared bankrupt, had an IVA or and ccjs against you, that I can say no?

I'd always assumed I did as it was a bankruptsy, but it seems I was wrong.
This would open up the market for me considerably.
Thanks for any advice.

fatbelly

That's correct.

It's insolvency but not bankruptcy

You only have to answer the question that is asked

James-may

That's great

K_S

@james-may I would caution against this interpretation. As an example, Santander asks this question "Ever been bankrupt or subject to an IVA?" and Accord asks "Has the applicant ever been subject to an Individual Voluntary Arrangement (IVA), Bankruptcy order or Trust Deed (Scotland only)?"

In both the above cases a DRO would count.

fatbelly

In both the above cases the truthful answer would be 'no'

If they wanted to ask about a DRO, they could do so.

In both examples they have chosen not to

It's not as if DROs are new - they have been around since 2009

James-may

Hmm, looks like it's a gray area.

sourcrates

James-may said:

Hmm, looks like it's a grey area.

I disagree, its quite clear cut, a DRO is not bankruptcy, nor is it an IVA, you have had neither, so the truthful answer is no.

If the question was "have you ever had a DRO"  ?, or "have you ever entered insolvency" ?

Then the answer would be a yes.
I side with fatbelly on this, they could ask you that question if they wished, but have chosen not too.

K_S

@james-may If you are intending to mark it as 'No', you're better off with a direct application. If you go through a broker, they will either know that this sort of question includes DROs or if they don't, they may (like I've done for demonstration purposes below) check with the lender who will ask them to put it down as a 'Yes' as that's the criteria irrespective of how the question is worded.

If you ask me how the lender would expect a layperson to know this, that's a good question

fatbelly

General principle - answer the question they ask, not the question they should have asked.

Just had a thought - I wonder if lenders will start to ask' Have you ever been in the Debt Respite Scheme (Breathing Space)?'

It's a formal scheme like the others we are discussing, run by the Insolvency Service

If they do, then it's something we should make potential entrants aware of

lonibra

K_S said:

@james-may If you are intending to mark it as 'No', you're better off with a direct application. If you go through a broker, they will either know that this sort of question includes DROs or if they don't, they may (like I've done for demonstration purposes below) check with the lender who will ask them to put it down as a 'Yes' as that's the criteria irrespective of how the question is worded.

If you ask me how the lender would expect a layperson to know this, that's a good question

I know you don't make the rules but this is so unfair. I accept that it's the bank's money and their rules but how on earth would a borrower know this? Why can't banks be clearer.

sourcrates

K_S said:

@james-may If you are intending to mark it as 'No', you're better off with a direct application. If you go through a broker, they will either know that this sort of question includes DROs or if they don't, they may (like I've done for demonstration purposes below) check with the lender who will ask them to put it down as a 'Yes' as that's the criteria irrespective of how the question is worded.

If you ask me how the lender would expect a layperson to know this, that's a good question

With respect, never trust the advice of someone who starts a sentence with the word "so".