Trying to understand whether a Debt Relief Order is right for me

trialanderror2020

flipflopflo said:

A bankruptcy is only a year also. It is on your credit file for six years. A bankruptcy will cover all your debts whether they are noted on your form or not (with a couple of notable exceptions). A DRO only covers debts up to £30k and only those that are noted on the form. 

You will have the same trouble with getting credit whether you go for either as they are both a form of insolvency. We suggest that you have an emergency fund sorted before you go for it so that when you have a washing machine break down then you can replace it. 

Also if you get an award before the year of the DRO is over then it will fail and you are left with the debts again. 

Thanks for explaining that. It doesn't seem like there's any benefit to me in getting a DRO then.

trialanderror2020

sourcrates said:

There is not much difference in real terms between a DRO and Bankruptcy.

Both last 12 months, both affect your credit for 6 years, the only real difference is a DRO can fail, if you come into money within those 12 months, whilst Bankruptcy can`t fail.

There is a 30k limit on debts with a DRO, Bankruptcy includes all your debts, whether you know of them or not.

You should not need credit for a new washing machine or fridge, you can buy both for less than £150 each (if you shop around) any such purchase should come from your emergency fund.

Let them make their move, with both options, if you get money after the 12 months are up, its yours to keep.

Thanks. I guess I'll just leave them to get on with then. If they want to waste more money to have me declared bankrupt when they know I have no money, so be it.

I read this, which says that if they do serve a statutory demand, I could apply to set it aside on the grounds that the debt is disputed, and if that is successful they'll have to pay my costs. Statutory Demands | Helix Law (helix-law.co.uk)
 
I thought if I had a strong case and I was likely to get my costs then the solicitors might assist me under a conditional fee agreement, but they said they can't do that and asked for £2,400 to provide their initial advice.

The only other option I can think of is to crowdfund the money to pay off the debt. I think that might be possible, as a lot of people are fed up with this local authority and are grateful for the work that I've done to stop it breaking the law (I've won a few cases against it), but receiving donations into my bank account would probably affect my means-tested benefits and legal aid entitlement. GoFundMe says I can nominate a beneficiary to receive the funds, so I could nominate my Dad who doesn't receive any means-tested benefits and then he could pay the creditor so I never receive any money myself. Would any donations he receives be treated as gifts rather than taxable income?

trialanderror2020

I emailed them to remind them that they know I have no means of paying their costs, and they would just be wasting more taxpayer's money issuing me with a demand to pay.

They've replied to say that they have a duty to residents to use all possible means of recovering debts, and that my £50/month civil service pension, which is deducted from my means-tested disability benefits, "may well be a realisable asset by a Trustee in Bankruptcy" and they want me to pay them £50/month, thus leaving me with less income than the Government says I need to cover the costs of living with my disabilities, and if I agree to pay them £600/year they'll be "prepared to consider" staying the 8% interest on the debt (£1,300/year).

I sent them the information that the court ordered me to provide at the last hearing, after they obtained an order for me to attend for questioning about my means (despite knowing exactly what my means are), which shows that the pension provider, Civil Service Pensions, would charge me a fee of £653.65+VAT to tell me what the Pensioner Equivalent Transfer Value (PETV) of my pension is, and I can only ask for that if I declare that it is for divorce purposes. Even before I had that information, the judge at the hearing questioned whether a civil service pension, as opposed to a private pension, could be taken to pay a debt, so it seems unlikely that it's a "realisable asset" but I don't think it would make any difference to me even if they were able to take it, as my means-tested benefits would just increase by £50/month.

sourcrates

How old are you ?

From my understanding of the regulations, if you are 54 or older, and have a drawable pension policy, the OR can seek an IPA to the value of your pension monthly benefits.

If you are younger, and the pension won`t become drawable within the timeframe of a standard IPA, then the pension is excluded property.

trialanderror2020

sourcrates said:

How old are you ?

From my understanding of the regulations, if you are 54 or older, and have a drawable pension policy, the OR can seek an IPA to the value of your pension monthly benefits.

If you are younger, and the pension won`t become drawable within the timeframe of a standard IPA, then the pension is excluded property.

I'm 51 but I've been medically retired and drawing the pension for years.

I don't know what an IPA is, but if they can make me pay them my £50 pension each month that would be bad, as technically I'd still be receiving it before paying it to them, so it would still be deducted from my means-tested benefits.

sourcrates

IPA - Income payment arrangement, usually lasts for 3 years in bankruptcy.

flipflopflo

@sourcrates can you please confirm or not that although the money will be taken into consideration for an IPA if the OP’s SoA shows that they have no surplus then an IPA won’t be given. 

sourcrates

flipflopflo said:

@sourcrates can you please confirm or not that although the money will be taken into consideration for an IPA if the OP’s SoA shows that they have no surplus then an IPA won’t be given. 

That, should be the case, yes, it`s the standard financial statement that`s used.