DRO or BR....

maxmycardagain

If someone was borderline bankrupt but could have the option of a DRO what would you say are the pro's and cons of the 2?

it seems a DRO (now £30,000 limit) is scrutinised more than a BR, and that the (sole debts) debtors partners income and assets are are risk (and counted as joint income) whereas with a proper BR - though the fees are higher - is wham bam, (JD job done) and a partners work/income/ferrari are of no interest to the Insolvency service

or ..........................

JonVarnas

I'm in the last month of my DRO and I've had no contact with the Insolvency Service since they approved my application - they basically check your credit file and that's it. If you have low enough income and debt and don't think your circumstances will change for a year then I'd say a DRO is a no-brainer...far cheaper as well.

fatbelly

maxmycardagain said:

If someone was borderline bankrupt but could have the option of a DRO what would you say are the pro's and cons of the 2?

it seems a DRO (now £30,000 limit) is scrutinised more than a BR, and that the (sole debts) debtors partners income and assets are are risk (and counted as joint income) whereas with a proper BR - though the fees are higher - is wham bam, (JD job done) and a partners work/income/ferrari are of no interest to the Insolvency service

or ..........................

I would say the opposite is true - a DRO usually goes through on the nod whereas things will be looked at in bankruptcy.

Look at the fees and think 'How much time does that buy at the Official Receiver?' DRO costs £90, bankruptcy £680.

Neither your assets nor your partner's are at any risk in a DRO. If assets are discovered that breach the DRO criteria then the DRO fails. In bankruptcy discovered assets are likely to be sold to cover the OR fees at least (the £680 is just a deposit against the fees).

The main advantages of bankruptcy over a DRO is that it cannot, generally speaking, fail, and that all debts that yu are liable for at the bankruptcy date, are covered, even if they are not listed on the forms. So if you know 'there are a lot of debts out there' but 'I can't remember them all' then a bankruptcy may be a better strategy especially if close to the 30k max.

Most other differences favour a DRO.

MalMonroe

Hi, I totally agree with JonVarnas and fatbelly.

I've had a DRO, arranged for me by StepChange. I'm out at the other end now, successfully rehabilitated (that is to say I now know what to do about my finances and manage them 100% better than I ever did before). I feel so grateful that a DRO was an option for me at that time. 

Have you had a word with one of the free debt help agencies? For obvious reasons I do always recommend StepChange, link here - https://www.stepchange.org/

I'm sure they will recommend a DRO and if they do they will help you to apply for it. They are not judgemental and all they need from you is a SOA - statement of affairs - when you phone. 

There's a wealth of information about bankruptcy here -

https://www.gov.uk/government/publications/guide-to-bankruptcy/guide-to-bankruptcy

with a handy link to click on, telling you all about a DRO. Which is far less complex and limiting than bankruptcy.

So that's three votes for a DRO, with at least two of us having been through that process ourselves. 

maxmycardagain

The guy in question is of the opinion he new partner wont be happy providing her bank accounts/statements/income when the debts are his and his alone, they havent been together long, the debts are from before they met
 she knows of his financial problems (mainly caused by his divorce)

JonVarnas

maxmycardagain said:

The guy in question is of the opinion he new partner wont be happy providing her bank accounts/statements/income when the debts are his and his alone, they havent been together long, the debts are from before they met
 she knows of his financial problems (mainly caused by his divorce)

With a DRO they wouldn't be interested in his partners income, just his. They won't even ask for his bank statements. Once the debt intermediary has checked and submitted the application it is basically rubber stamped.