DRO overthinking and silly questions.

cccxxxooo

Hi everyone, I am in the process of applying for  a DRO with Stepchange, I haven't actually spoken with anyone at stepchange yet, I have just sent over the documentation and I am waiting on my tax credit award letter being sent to me to send onto stepchange, so I may be jumping the gun a little bit here but I wanted to ask a few questions (that are keeping me up at night!!) if anyone wouldn't mind answering them.

1) When I applied to Stepchange I was not in my overdraft, so I didn't list it as a debt, but now I am, it really depends at what point of the month it is as to whether I will be in it or not, does this matter? Should I phone Stepchange and inform them?

2) I rent from a housing association and have included my rent arrears in the DRO, I have checked over my tenancy agreement but I cannot find anything RE: DRO's, are they likely to kick me out? I owe around £300 to them and I know I will have to pay this, I just can't at the minute. Once the DRO is in place I could begin paying this back, I have tried to contact them today but they aren't answering the phones to answer this for me. I have a young son so I am particularly worried about this. 

3) I am struggling badly at the minute for money, could I stop paying the debts that are included on my DRO now or is this a bad idea? If I didn't have a few of the bigger payments to make I could manage far better this month. 

4) I have a loan with my own bank, this is the largest debt I owe, so I imagine I will need to open another bank account once my DRO goes through, is this something I can do now or would i have to wait until after my DRO has been completed? Can I open any basic bank? Is it simply a case of signing up with a new bank and having my employer change my details on the system?
  
5) Does anyone have a rough idea of how long all of this takes? I feel ill with worry, I feel much better having contacted Stepchange and started doing this but I feel full of anxiety worrying about what if something goes wrong? What if it isn't done before my breathing space ends etc? If anyone has ever had a DRO or similar, when did it feel like you could breath again?

6) If and when the DRO ends, what happens? Do you have to send budgets again or bank statements? I am worried because my grandma lives in Spain and has paid for flights for me and my son this summer, I will probably use my bank card over there but I worry it will be seen as me having enough money to go on holiday and therefore enough to pay back these debts! (not the case, I could never afford it without my grandma)

Thanks for reading, I have trawled through this forum trying to find answers but I couldn't really find anything with this specific information. Thank-you in advance for anyone who can offer any guidance. 

sourcrates

Hi,
In answer to the above -

(1) Not important yet, at some point you must list all your debts, to make sure you are under the 30k limit.

(2) Rent is a priority payment, you should not be paying your unsecured, non priority debts when you have rent arrears, you need to address this ASAP.

(3) Yes, as above, you should already have done this.

(4) You can apply for a basic bank account from a number of providers, some you can apply directly, others are offered to you if you fail to meet the criteria for a current account, but its a basic first step if you bank where you have debts.

(5) Collection activity takes months, even years, nothing happens quickly, I`m unsure how long DRO`s take to organise now, mine was less than a week, but that was a while ago, don`t worry about your non priority debts, concentrate on paying those rent arrears.

(6) £90 does not buy much of the insolvency service`s time, all that happens is you are discharged from your debts, no fanfare or public announcement, it all happens automatically, no one checks up on you, no one is watching you, you are basically left to look after yourself once approved, that`s it, all very simple and straightforward, try not to overthink things.

Brie

Set up a new bank account sooner rather than later and ensure it is in a different banking group than the one you currently use and has the overdraft.  So if it's RBS not Natwest.

Be open and honest with the housing association.  Tell them you know you have arrears and are talking to Stepchange to try and get your situation sorted out.  Tell them you know that they are a top priority.  Then talk to all of your other creditors and say again that you are discussing your financial situation with Stepchange and need them to put everything on hold for now.

If you have any problems getting things going with Stepchange try Citizen's Advice or your local food bank as some of them have debt advisors as well.

cccxxxooo

Sourcrates and Brie thank you so much for answering these questions for me, I will try to call my landlord again tomorrow and explain and have just submitted a request for a new bank account. I feel better already, knowing that I have a plan and action I can take. 

Thank you both again!

MalMonroe

Hi, I've had a DRO with StepChange and I did find that it was better to speak to someone on the phone. They can really answer all your questions and they do not make you feel silly or at all uncomfortable, they are totally non-judgemental.

You've had some great feedback here but if you are in touch with your own adviser at StepChange, you can refer to them. Doing things online is okay but it doesn't beat speaking to an actual person. I was allocated the same person who spoke to me and dealt with my DRO and helped me to submit my application. After I'd had my first phone call with the adviser, I felt so much better. I know exactly what it's like when everything seems to be impossible and you can't see a way out and it makes you feel ill and unable to sleep.  

For me, financially, having a DRO, while quite scary at first, was the best thing I have ever done. You have taken the first steps though, and you've come here too, all good. You're on your way, so I hope you can start to feel, and sleep, a bit better.

Also hope this has helped in some small way, many of us have been in your shoes and we have survived. All the very best to you.

RichinFriends

2) May I suggest you email your HA so you have a record of advising them you are having financial difficulties. It can be hard to get through on the phone and maybe it will make you feel better too as you can cross it off your list. They'll contact you/you can tell them when you're available for a call. I expect they will be supportive and set up a repayment plan to work with your current budget. When DRO goes through, most HA's will wipe the debt. You can ask them that too, of course. Eviction is not what they are aiming for unless you have other issues you present them with like Anti-Social behaviour. Even then, it's very difficult for them to evict anyone. Your debt is tiny compared to most and if you are in contact with them then you are working with them.
Best of luck.

fatbelly

Current tenancy Rent arrears in a DRO.

You are allowed to make payment to these during the DRO. It is an exception to the general rule that you must not pay your debts. It is expected that payments will be small as you are only allowed £75 per month max surplus.

My local HA does put the debt into a separate account and anything remaining when the DRO completes, writes off whatever is left.

Now there is nothing in DRO regs that says they must do this.

How common that practice is I do not know. You could ask. You won't be their first tenant to do a DRO.

ManyWays

Your local Citizens Advice may know how some local HAs treat rent arrears in a DRO.

sourcrates

If your rent arrears are just £300 then it makes perfect sense to stop paying your non priority debts (as nothing significant will happen with those) and concentrate on getting those rent arrears down to zero.

You won`t then have to worry about how a DRO will affect your situation, and you will have much more piece of mind, repay the priority debt then look at a DRO.

ToxtethO'Grady

The only way your rent arrears could cause an issue would be if they were for 8 weeks (if you pay weekly) or 2 months (if you pay monthly) worth of rent or a quarter (if you pay quarterly). That is the limit of arrears that means a landlord can take it to a possession hearing. If there is already a possession order then you should clear the arrears and not pay your unsecured debts. Your HA should be following the pre-action protocol for LHA tenants and that is to contact you, to offer debt or income advice before issuing anything. Speak to your tenancy officer or a lot now have specific money advice teams.

In fact tell your unsecured debts if you have a Notice of Seeking Possession or a possession order, if so they should give you time to clear your arrears.

If you are worried about your unsecured/non-priority debts pay them a token payment of £1 per month until the DRO is approved/rent arrears are cleared. They would find it hard to go for a CCJ due to the fact you are not missing payments you are reducing them. Even if they did the CCJ's would be included in the DRO and CCJ/DRO show on your credit file for 6 years.

Make sure to pay by Standing order and cancel any Direct debits you have with your unsecured debts.