DRO?

markrocks

Hi. I've been a fool and got myself about £18500 worth of debt. After an incomings and outgoings review I'm left with about £50 per month so I qualify for a DRO but I have been told that they are more complicated than they seem. I'm on £20000 per year and if I get a better paid job within the DRO time period (usually a year I believe) then I think it gets cancelled and I'm back to square one re debts.
Two debts are on their 2nd 6 month hold period to be reviewed in November. One debt is on £20 per month and the other I need to talk to but will probably be the same amount.
I've got a friend saying just go bankrupt, it costs more but 12 months time then I'm in the clear and can start again.
DRO is cheaper and from what I can see it is the same as long as I don't earn any more than I already do. Which is already a struggle.
All advice grateful.
Thank you.

MalMonroe

Hi, have you spoken to one of the free debt help agencies? I always recommend StepChange as they helped me to get out out of terrible financial difficulty a few years ago. I had a DRO and always say it 'saved my life' because I was really at the end of my tether. However, it certainly wasn't a walk in the park.

You may or may not be eligible for a DRO but if you contact a debt help agency - there are others, not just StepChange but I'll put their link here -

https://www.stepchange.org/

You won't be 'in the clear' after 12 months with either bankruptcy or a DRO because they stay on your credit files for a whole six years. That makes things difficult when you're looking for credit or any financial help at all. Believe me, I've been there. It doesn't bode well to be flippant about it either and I would say don't just jump in without really considering what you are doing and certainly don't do it without taking any (free) advice.

There are other ways out of debt than a DRO or bankruptcy.

You really do need to talk to one of the experts in debt so you know exactly what the options are. They'll want to know about all your incomings and outgoings too so you should prepare a detailed Statement of Account (SOA) before you contact them. They're very wise and if it's anything like my experience, you are allocated your own advisor who you can contact direct if you need to.

Qualifying data for a DRO has very recently changed but an advisor will be able to discuss that with you. 

fatbelly

Hi. DROs are not really complicated. However, you do have to go through an Approved Intermediary (and stepchange would be a good choice) and they have to comply with FCA requirements which may make it all seem very complicated.

The surplus income criterion is £75 per month now - if you breach that during the 12-month moratorium then the DRO can be revoked.

Bankruptcy rarely fails but you could be asked to make a payment from income if you have over £20 per month surplus, and this lasts 3 years. The fee is also a lot more at £680 so the general advice is to go for a DRO if you qualify.

markrocks

I know that if I go down the DRO or bankruptcy route then it stays on my file for a long time. That bit doesn't bother me so much, once I'm out of this hole then my personal fiscal policy is going to be one of saving for things and avoiding credit. 
Thank you both for your words. CAB mentioned StepChange when they helped me get my agreements in place.
Looks like the DRO is going to be the solution, but first, Do an incomings and outgoings, speak to StepChange.
Thanks again

fatbelly

Yes, they'll guide you from there. 

Sounds like you have a good attitude to move forwards with.

Let us know if you have any more questions