DRO ... for self employed, much difference?

edited 16 October 2021 at 4:31PM in Bankruptcy & living with it
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maxmycardagainmaxmycardagain Forumite
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edited 16 October 2021 at 4:31PM in Bankruptcy & living with it
Anyone know what info the IS (or agency) require for a self employed person applying for a DRO?

Also, does a DRO mean closing all bank accounts?

cheers 
Now we all know how it felt to play in the band on the Titanic...
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  • edited 16 October 2021 at 5:32PM
    sourcratessourcrates Forumite
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    edited 16 October 2021 at 5:32PM
    You can remain as a sole trader with a DRO, but its not an option if you are a company director.

    You are also subject to the £75 disposable income threshold, and the ban on taking more than £500 in credit.

    Your income is worked out on your previous years figures, so if your income fluctuates, it can be a problem, your DRO may be revoked if you go over the limits, it may not be the best option here.

    You only include debts, not every account is a debt, if the bank account is not in debt, then it will not form part of your DRO.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • edited 16 October 2021 at 8:46PM
    maxmycardagainmaxmycardagain Forumite
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    edited 16 October 2021 at 8:46PM
    You can remain as a sole trader with a DRO, but its not an option if you are a company director.

    You are also subject to the £75 disposable income threshold, and the ban on taking more than £500 in credit.

    Your income is worked out on your previous years figures, so if your income fluctuates, it can be a problem, your DRO may be revoked if you go over the limits, it may not be the best option here.

    You only include debts, not every account is a debt, if the bank account is not in debt, then it will not form part of your DRO.

    Ive told the guy he should consider ceasing to trade, more trouble than its worth TBH now, although he has had all 5 SEISS grants
    Now we all know how it felt to play in the band on the Titanic...
  • edited 17 October 2021 at 2:16PM
    maxmycardagainmaxmycardagain Forumite
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    edited 17 October 2021 at 2:16PM
    so under £75/week spare the IS wont impose a payment plan ?

    where can i tell the guy to look for advice on what`s allowed?

    cheers
    Now we all know how it felt to play in the band on the Titanic...
  • edited 17 October 2021 at 2:16PM
    sourcratessourcrates Forumite
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    edited 17 October 2021 at 2:16PM
    so under £75/week spare the IS wont impose a payment plan ?

    where can i tell the guy to look for advice on what`s allowed?

    cheers
    You are referring to a Debt Relief Order.

    £75 is the monthly disposable income threshold, above which a DRO would not be granted.

    Nothing to do with making payments, as you do not make any payments during a DRO.

    I think your confusing this with Bankruptcy, where the IS may look to making an IPA (Income Payment Arrangement) if you have more than £20 monthly disposable income.

    You should refer them to Business Debtline.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • maxmycardagainmaxmycardagain Forumite
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    so under £75/week spare the IS wont impose a payment plan ?

    where can i tell the guy to look for advice on what`s allowed?

    cheers
    You are referring to a Debt Relief Order.

    £75 is the monthly disposable income threshold, above which a DRO would not be granted.

    Nothing to do with making payments, as you do not make any payments during a DRO.

    I think your confusing this with Bankruptcy, where the IS may look to making an IPA (Income Payment Arrangement) if you have more than £20 monthly disposable income.

    You should refer them to Business Debtline.
    OK thanks

    where can he find details of what he can put as living costs for income/outgoings?
    Now we all know how it felt to play in the band on the Titanic...
  • sourcratessourcrates Forumite
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    There will be limits, but we are not privy to them, everyone's budget is individual, and unique to them.

    You must have £75 or less left after essential bills are paid, not including debt repayments, otherwise you do not qualify.

    Information can be found on intermediary sites such as stepchange and CAB.
    Ex MSE Board Guide.

    More than a third of IVA`s fail....fact.
    Could A Debt Relief Order help you ?
    Never pay a fee for a Debt Management Plan.
    For free non-judgemental debt advice, contact either : Stepchange, National Debtline, or CitizensAdviceBureaux.
  • maxmycardagainmaxmycardagain Forumite
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    So, someone who has been self employed in the last 2 years but isnt at the time of application...

    do they use stepchange or the business debt version?
    Now we all know how it felt to play in the band on the Titanic...
  • maxmycardagainmaxmycardagain Forumite
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    JCS1 said:
    I appreciate that, but as a recent ex-business which version should he use?
    Now we all know how it felt to play in the band on the Titanic...
  • edited 23 October 2021 at 10:55AM
    maxmycardagainmaxmycardagain Forumite
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    edited 23 October 2021 at 10:55AM
    On the subject of a SOA for a DRO - how does the IS apportion a couples costs per month vs 1 applicants income?

    In this case the outgoings (very basic) are £1000/ month with only the applicants £950 pension coming in

    (allowing £350/month for food for 2 )


    Now we all know how it felt to play in the band on the Titanic...
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