DRO-Used credit last month

Kazlou11

Hello, 

I am currently going through DRO process with StepChange. I used 2 of my credit cards last month will this affect the DRO being approved, should I wait to proceed? The transactions where of course before I got debt advice. 

I’m currently only 1 month behind on payments my situation has changed dramatically so I’m no longer affording the debts. 

If anyone could advise me that be great! 

Thank you! 

sourcrates

Won`t make a shred of difference, they will look at any preferential payments you might have made, but as for taking credit, won`t be a problem, none of us know what`s around the corner do we.

UsetheFORCE

I dont know for sure but the amounts and what you spent it for might well affect it! 

If your car broke down and need repairs then maybe it will be okay but something less of an emergency and they may indeed have a problem with it!

Kazlou11

I’ve had to stop the payments to all at the same time so hopefully be ok then. Thank you didn’t know how far behind you had to be etc. 

liggerz87

Step change will probably make you wait 3 months because of the preferred payment

sourcrates

liggerz87 said:

Step change will probably make you wait 3 months because of the preferred payment

It wasn`t a payment, they took out credit, makes no difference to anything.

Lots of people use a credit card or bank overdraft to pay the bankruptcy fee`s then go bankrupt and that debt gets included in the bankruptcy, you do what you have  to do.

Platespinner123

sourcrates said:

liggerz87 said:

Step change will probably make you wait 3 months because of the preferred payment

It wasn`t a payment, they took out credit, makes no difference to anything.

Lots of people use a credit card or bank overdraft to pay the bankruptcy fee`s then go bankrupt and that debt gets included in the bankruptcy, you do what you have  to do.

It's worth noting that the Insolvency Service says "You shouldn't use your own credit card to pay for your bankruptcy". Your credit card company or bank could consider this fraud, as you've taken out credit without any intention to repay.

I'm sure that people do often use credit to pay bankruptcy (or DRO) fees without issue, but there is some degree of risk. So if there are other options available e.g. a charitable grant, friends/family helping, etc, it could be a good idea to explore those first.

JonVarnas

Platespinner123 said:

sourcrates said:

liggerz87 said:

Step change will probably make you wait 3 months because of the preferred payment

It wasn`t a payment, they took out credit, makes no difference to anything.

Lots of people use a credit card or bank overdraft to pay the bankruptcy fee`s then go bankrupt and that debt gets included in the bankruptcy, you do what you have  to do.

It's worth noting that the Insolvency Service says "You shouldn't use your own credit card to pay for your bankruptcy". Your credit card company or bank could consider this fraud, as you've taken out credit without any intention to repay.

I'm sure that people do often use credit to pay bankruptcy (or DRO) fees without issue, but there is some degree of risk. So if there are other options available e.g. a charitable grant, friends/family helping, etc, it could be a good idea to explore those first.

Have there been any cases where this has happened? Any prosecutions?

Robbie64

As long as you don't use any credit once you've taken debt advice then there shouldn't be a problem. I was granted a DRO in September 2019. I had used my credit card in early May 2019 and took debt advice from StepChange later the same month. I was advised that as long as I no longer used the card from the point of getting debt advice then there wouldn't be a problem.

It took about 4 months from when I first contacted StepChange to when the DRO was granted so by the point the DRO was granted it was heading towards 5 months since I'd last used the card. I'd imagine the process hasn't become quicker since then.

liggerz87

sourcrates said:

liggerz87 said:

Step change will probably make you wait 3 months because of the preferred payment

It wasn`t a payment, they took out credit, makes no difference to anything.

Lots of people use a credit card or bank overdraft to pay the bankruptcy fee`s then go bankrupt and that debt gets included in the bankruptcy, you do what you have  to do.

That's what they did with me made me wait 3 months 

sourcrates

JonVarnas said:

Platespinner123 said:

sourcrates said:

liggerz87 said:

Step change will probably make you wait 3 months because of the preferred payment

It wasn`t a payment, they took out credit, makes no difference to anything.

Lots of people use a credit card or bank overdraft to pay the bankruptcy fee`s then go bankrupt and that debt gets included in the bankruptcy, you do what you have  to do.

It's worth noting that the Insolvency Service says "You shouldn't use your own credit card to pay for your bankruptcy". Your credit card company or bank could consider this fraud, as you've taken out credit without any intention to repay.

I'm sure that people do often use credit to pay bankruptcy (or DRO) fees without issue, but there is some degree of risk. So if there are other options available e.g. a charitable grant, friends/family helping, etc, it could be a good idea to explore those first.

Have there been any cases where this has happened? Any prosecutions?

What would be the point if the debtor was going Bankrupt anyway ?

They would not get any of the money back under those circumstances, plus they would be throwing away more money in legal costs.

Much better to allow the debtor to go bankrupt, and then if an IPA is agreed, at least they will get some return.

Businesses usually take the route of what`s going to cost them the least amount of money and hassle, rather than issuing punishment for a misdemeanour.