DRO but on variable income/need to pay student loans debt

Cadk

I am looking into getting a DRO but my income is extremely varied.

tl:dr:
My budget varies with my income, how will it affect a DRO?
I need to pay student loan overpayment debt to be able to apply for student finance, will this stop me getting a DRO?


I work as a tutor through an agency which means I don't work holidays, so I don't get paid for those weeks. I can also lose work with no notice or they can offer me more work (but I don't always know when this will start until last minute). I'm also disabled and am limited in how much I can actually work. Because of this my budget changes based on what I earn (if I earn more I don't necessarily have more 'spare income') because when I earn less I have to make decisions on what to pay, e.g. I had to cancel the vet plan (flea/worming/vaccination) I had, so I could keep paying for pet insurance (which is a much lower policy than I'd like) and my food budget is often lowered to as little as I can get it (though because of autism it's not sustainable for me to keep it that low all the time). I have just been granted ESA which means I can reinstate the vet plan and possibly increase my food budget again. I'm applying for PIP which might mean my income will increase, but my budget might also increase. How will this affect a DRO?

I have also applied for a masters degree for September, and if I am accepted it will mean my income will change again. I will be working around the course, which means my income will vary based on the hours I can work around classes/etc. This also brings me onto the second thing, I owe student loans company around £150 (for an overpayment) and in order to apply for a masters loan, I will need to pay that off, but to get a DRO you can't have shown any creditors any favouritism (although there seems to be a provision for explaining why you have) would an application be likely to be rejected if I pay that off?

Thank you in advance for any help!

Sonic101

Hello

As a first port of call, have you tried speaking to a reputable organisation such as National Debtline (https://www.nationaldebtline.org); StepChange (https://www.stepchange.org); or the CAB (https://www.citizensadvice.org.uk)? They will help you go through your budget. For a DRO a ‘stable’ income is preferable but if you were deemed eligible your intermediary  would take an average of your earnings.

Benefits/disability payments age not usually taken into account, but that is another thing the above organisations will be able to advise you on.  

As I understand it, student loans cannot be included in insolvency and you are legally obliged to pay them back them back, so paying the money off the student loan wouldn’t be quite the same as paying £150 to one of the creditors whose debt will be wiped out by the DRO but not to the others. However, I should emphasise that that is my opinion rather than expert advice, so definitely don’t do it without taking proper advice. 

Good luck and let us know how it goes.

sourcrates

How much debt do you have, as you don`t say in your post ?

For a DRO to be successful, you need to have 12 months of regular, stable income, because if your disposable income rises over the £75 monthly allowance, your arrangement may be failed.

If your income varies, then the DRO intermediary will take an average figure for DRO purposes.

Information can be found here -

DRO applications - frequently asked questions · Debt Camel

Cadk

Just under £29000.

Yes, that's what I was asking for help with. 

My income isn't stable and hasn't been for around 4 years. I don't want to rely solely on benefits so I try to work when I can which means my income varies. I am usually able to work for short periods of time before I end up having to leave my job, which then means I have to change my budget (cut stuff out that I can't afford but are considered normal expenses, and not consider the extra expenses I have because of my disability). Then when I am able to work again, my income changes and my normal household expenses change too. I do not have £75 disposable income a month, even if my earnings increase. I hope that makes sense?

I suppose my question is, would I still be able to get a DRO with this kind of varied income?

Your link was very helpful, thank you

sourcrates

Well I can`t answer that, you have to put your details to an intermediary, who will then go through the process with you, as long as your disposable income is below the threshold, there shouldn`t be a problem though.

Sonic101

Cadk said:

Just under £29000.

Yes, that's what I was asking for help with. 

My income isn't stable and hasn't been for around 4 years. I don't want to rely solely on benefits so I try to work when I can which means my income varies. I am usually able to work for short periods of time before I end up having to leave my job, which then means I have to change my budget (cut stuff out that I can't afford but are considered normal expenses, and not consider the extra expenses I have because of my disability). Then when I am able to work again, my income changes and my normal household expenses change too. I do not have £75 disposable income a month, even if my earnings increase. I hope that makes sense?

I suppose my question is, would I still be able to get a DRO with this kind of varied income?

Your link was very helpful, thank you

Hi again

Your debts currently fall within the 30k limit for a DRO, and if your (average) monthly disposable income is less that £75 you will be eligibl. However as Sourcrates said, nobody will be able to tell you for certain, you will need to approach an intermediary (your best bet being one of the organisations previously suggested). 

When you speak to an advisor/intermediary they will go through your budget with you, so it might be a good idea to have a look at this in advance, and while you're doing that you could work out your average monthly earnings from employment (add up your total take-home earnings from each month for the past 12 months and divide by 12 to get the average).

Going slightly off topic, it's non of my business but it sounds as if your work is more trouble than it's worth. It's admirable that you don't want to rely solely on benefits, but you say that you are "usually able to work for short periods of time before I end up having to leave my job", which sounds stressful.

You're a student, right - so it would surely be justifiable to give up work while you're studying to focus on the studies?

Alternatively, would it be better/easier to get a regular job of just a few hours a week? Or could you get work as a private tutor independently rather than through an agency, so you'd have more control over when you work?