o2 Mobile account has to be included?

GreyhoundRunner

Hi I am about to send off my application for DRO shortly, but I have been advised that because o2 list their handsets as a loan this has to be included in my DRO and that o2 may cancel my account altogether because of this. Does anyone know if there is any way around this at all? I have been with o2 for around 10 years and paid everything as usual each month and would rather not have this hassle if it is avoidable, I'm sure I saw someone talk about this on the forum before but I cannot find the discussion.
Thank you in advance

sourcrates

Just use a PAYG sim card instead.

All your debts must be included in a DRO.

fatbelly

Info is now online and constantly updated

https://www.gov.uk/guidance/debt-relief-orders-guidance-for-debt-advisers


Under mobile phone contracts it says

Handsets

The approved intermediary should check the type of agreement, as some mobile phone contracts include two agreements, one for the handset and the second covering airtime (text message, calls and data allowances).

Generally, the agreement for the handset will be an unsecured loan. If this is the case, the remaining balance must be scheduled in the application. The debtor will need to check their agreement as non-payment of the loan could lead to termination of the whole contract.

In some cases, the handset may be subject to a hire purchase agreement. In these situations, AIs should apply the general hire purchase principles. See hire purchase agreements and conditional sale agreements.

If the handset is not subject to hire purchase, the phone belongs to the debtor and the value of the handset or device should be checked to make sure it does not breach the asset limit.

Contracts for airtime

If the debtor is up to date with their airtime contract and there is no outstanding liability at the date of determination, then there would be no need to schedule this in a DRO.

The approved intermediary should assess whether the payments for the airtime meet the debtor’s basic domestic need and therefore be an allowable expense.

Debtors will also need to check their agreement for any insolvency clauses that could lead to the termination of their contract upon entering into a DRO.

Preferences

Contractual payments made towards mobile phone contracts do not need to be reported as preferences.

However, if the client has made payments to clear any arrears, these should be reported on the application. The approved intermediary should include circumstances regarding the repayment.