DRO - which intermediary and breathing space?

Hello everyone.

I’ve had my lightbulb moment. I currently have approx. £12.5k of unsecured debt which I can no longer pay due to a change in circumstances, a situation which won’t improve at least for the next two years. When the initial panic and shame subsided, I spent lots of time reading this forum.

The advice on this forum has been invaluable, reading the reassurance the regular posters have given others has given me a huge confidence boost and I’m now feeling pragmatic and positive about the future. Thank you all so much for the time you give.

I’ve concluded that a DRO is the best way forward for me. I don’t have enough money after priority spending to do anything meaningful in paying down debt, and there is too much uncertainty on when my situation might improve. The Step change calculator and the Money Wellness calculator agreed when I filled in the online questionnaires. I have opened a new bank account, and I’m in the process of manually moving all DD’s over. This should be finished tomorrow. I think I’m ready to get the ball rolling with the DRO intermediary. I have a few questions and was wondering if anyone would be so kind as to help?

·       Last month/this month I’ve had to do cash transfers from my credit cards to my bank account to cover living expenses (had cards about 2 years). Will this make a difference to the application – will the intermediary advise to wait a few months before applying?

·       I’m waiting on a call back/email from CAB but I’ve read they are extremely busy at the moment. Stepchange recommended Money Wellness who don’t seem to be as well regarded as CAB. Are there any red flags I should look out for if I start the process with them?

·       Should I just cancel all DD’s to my debtors? Or should I go for breathing space? I assume the breathing space means that I wont be hassled by any collection activity?

Thanks in advance for any advice. I’ve posted my SOA below in case you want to take a look.

 

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 1

Number of children in household......... 0

Number of cars owned.................... 1[b]

 

Monthly Income Details[/b]

Monthly income after tax................ 1717.06

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 1717.06[/b][b]

 

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 550

Management charge (leasehold property).. 0

Council tax............................. 89

Electricity............................. 87.83

Gas..................................... 59.38

Oil..................................... 0

Water rates............................. 52.15

Telephone (land line)................... 0

Mobile phone............................ 11

TV Licence.............................. 13.25

Satellite/Cable TV...................... 0

Internet Services....................... 34.3

Groceries etc. ......................... 216

Clothing................................ 20

Petrol/diesel........................... 303

Road tax................................ 13.18

Car Insurance........................... 46.06

Car maintenance (including MOT)......... 60

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 11.33

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 20

Haircuts................................ 10

Entertainment........................... 20

Holiday................................. 20

Emergency fund.......................... 0[b]

Total monthly expenses.................. 1666.48[/b]

[b]

 

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 1500

Other assets............................ 0[b]

Total Assets............................ 1500[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

 

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Virgin CC......................3620.73...54.09.....0

Halifax CC.....................3035.32...133.8.....0

M&S loan.......................5762.13...174.6.....0[b]

Total unsecured debts..........12418.18..362.49....-  [/b]

 

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 1,717.06

Expenses (including HP & secured debts). 1,666.48

Available for debt repayments........... 50.58

Monthly UNsecured debt repayments....... 362.49[b]

Amount short for making debt repayments. -311.91[/b]

 

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 1,500

Total HP & Secured debt................. -0

Total Unsecured debt.................... -12,418.18[b]

Net Assets.............................. -10,918.18[/b]

 

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]


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Comments

  • fatbelly
    fatbelly Posts: 20,197
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    edited 17 October 2023 at 3:52AM
    Yes it looks like a dro situation to me.

    See how you get on with CAB. If problems, consider Money Wellness. The main problem with them is that they prefer IVAs but that shouldn't be an issue for you.

    Cancel the dds now so that you treat everyone equally by paying them nothing. I wouldn't flag up the cards as an issue. No need for breathing space
  • your food and petrol is above acceptable limits.so if the regulator applies acceptable limits you will have above the £75 a month excess .
    pay your debt at your rate.not what the creditor demands.cos they have no power.they aren't the police.
  • fatbelly
    fatbelly Posts: 20,197
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    your food and petrol is above acceptable limits.so if the regulator applies acceptable limits you will have above the £75 a month excess .
    Neither of those things are true, Stu. There is a trigger figure for food-housekeeping and the op is below that. There is no figure for petrol - it is whatever the debtor spends
  • Thank you Fatbelly. They are all now cancelled.

    Thanks for your comments Stu12345_2. Could I ask what you believe the limits are? At the moment I have a 90 mile a day commute so the figure is a legitimate spend. Perhaps it's possible to compensate elsewhere in the budget? The Money Wellness online spending review stated that the shopping budget was ok. I will chat through with the advisor.

    Cheers
    Red.
  • Cross-posted. Thanks for the update fatbelly. 
  • stu12345_2
    stu12345_2 Posts: 797
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    edited 18 October 2023 at 10:02AM
    I read max allowance for food is £400 for 2 people and petrol is £200 per person I read the  allowances in iva guidelines.i did search online for a couple of websites showing max  allowances.for  petrol and above that would have to be explained.
    I think you can up your emergency savings.but you will have to drop holiday fund. and give yourself a higher  entertainment allowance plus give yourself dentist and prescription allowance.
    you could easily give yourself car parking and other transport.
    plus you get  can go on bus or train to places  on days off or park your car when you go shops or days outings.
    I did recently have my own thread asking about limits.what I do know is on a dmp the limits aren't set in stone as it isn't legally binding.but when you go down the formal route eg iva dro bankruptcy there are limits and some things aren't allowed eg holidays, smoking ,savings allowance. these would have to come from of a small emergency fund allowance.
    you have your own reason for having a job so far away.but if it was me id take a closer job and one that wouldn't destroy my car in to the ground. and you would have lots of money left over to avoid a dro.maybe choose a dmp.
    just speaking from personal experience as I had similar commute years ago .it destroyed my car.depreciated it heavily and had to have a good budget to replace it often. which ate into my earnings.
    pay your debt at your rate.not what the creditor demands.cos they have no power.they aren't the police.
  • fatbelly
    fatbelly Posts: 20,197
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    DROs work on SFS trigger figures but these are not publicly disclosed. They are generous however.

    There is no car-related trigger figure. They only cover

    Communications and leisure

    Food and housekeeping

    Personal costs
  • stu12345_2
    stu12345_2 Posts: 797
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    edited 18 October 2023 at 10:23AM
    the UK insolvency service  says it keeps expenses limits secret to stop anyone making a claim playing the system. only eg debt advisor agencies for example know these limits.but you can download acceptable living expenses from Ireland insolvency service on a pdf file.for a good reference.
    i will post the pdf link later or you can Google the limits.
    pay your debt at your rate.not what the creditor demands.cos they have no power.they aren't the police.
  • fatbelly
    fatbelly Posts: 20,197
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    Not needed for this thread, Stu. We're considering a DRO here. I have the SFS figures and the op is within them.

    If the Intermediary wants to tweak the budget or move things around that's fine. 
  • fatbelly, what are the SFS figures for the allowable expenses
    pay your debt at your rate.not what the creditor demands.cos they have no power.they aren't the police.
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