DRO Questions

[Deleted User]

I am set on going for a DRO but just have a couple of questions:

1) How deeply do they look into how the debt was accumulated? I don’t have detailed record of it and also there are unnecessary things put onto credit cards (house improvements, clothes, leisure activities etc)

2) How recent does debt have to be to be questioned? I refinanced things about 5 months ago and took out a new loan and CC…..it was a good idea at the time but things have spiralled again due to cost of living 

I’m quite apprehensive about it all! 

Sonic101

1) I wouldn’t worry too much about spending money on ‘unnecessary things’. Home improvements and clothes are necessary, but you should speak to a reputable debt advisory service - such as National Debtline, the CAB or StepChange -  about this. 

2) if you took the debt out five months ago and have been paying it there shouldn’t been a problem - it would only be a problem if you took the debts on then stopped paying immediately, as that could look like taking out credit knowing your couldn’t pay it back, which could be seen as fraud.
But again, you need to speak to a debt advisor about this - assuming you qualify for a DRO they may advise holding off applying for a DRO for a few months to be on the safe side.  

sourcrates

DRO`s are set up by a specialist DRO intermediary, how the debt was accrued is not that important, (as long as it was by legal means), the intermediary will work through your debts, your income and expenditure, and your personal circumstances, assuming you meet the criteria, they will prepare the paperwork for you, all you have to do is sign and return it, then pay your £90 quid.

The intermediary does everything else for you, including submission to the insolvency service.

An application is not/will not, be submitted if there are any doubts as to whether it will be accepted.

No need to be apprehensive, try not to overthink things, do you meet all the criteria for a DRO ?

[Deleted User]

Thanks! I probably am overthinking things, I just like to try and get things straight I’m my head before I go ahead with something! I do meet the criteria for a DRO but need to get a few balances sorted first (HMRC)

It’s good to know that its not just a ‘now or never’ situation if something isn’t quite clear, it sounds like they will advise you to wait until the situation changes suitably 

sourcrates

DRO`s can be tricky things, as the acceptance criteria mainly rests on whether you have £75 or less disposable income or not.

Now no ones budget is exactly the same, month in, month out, especially if you have a fluctuating income, so average figures tend to be used to calculate these things, in essence your budget only has to come together for DRO purposes, at the time of application, as that is the time that matters.

And as long as those figures don`t differ that much over the 12 months, you won`t need to inform the IS of any changes.

It is all self reported by the way, you are not checked up on once your DRO is confirmed.

So take your time, get your figures together, your budget worked out etc, don`t worry about your creditors, collection activity takes forever, the only thing that is checked up on is your income, your expenditure is not.

MalMonroe

Hi, the info in the following link might be helpful -

https://www.gov.uk/government/publications/getting-a-debt-relief-order/getting-a-debt-relief-order

For an intermediary you could contact one of the agencies at the end of sourcrates' signature, above. I used StepChange, who couldn't have been more professional and they were not at all judgemental.

I applied for my DRO eight years ago and found it quite a scary thing but looking back, it was the best thing I could have done, given my circumstances at that time. 

Good luck - although I'm sure you will be fine.