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Landlord Compensation Impact on DRO
Bernard_Nurse
Posts: 42 Forumite
I struggled to come up with a fitting title for this as it’s a little complex.
Situation is I am in debt to the point DRO application is imminent and unavoidable.
Amongst my debts are some rent arrears due to a social landlord.
There have been issues with the property which are finally getting resolved but only after a lengthy and protracted struggle which led to my raising a formal complaint.
As part of this, the landlord has just offered compensation which whilst not small change, isn’t enough to breach the combined asset / money £2k limit for a DRO.
Where it’s complicated is as follows:
The landlord has a policy of deducting any arrears from sums of compensation.
They are aware of my current financial situation and have urged me to accept the offer of compensation and so the above would apply - I would end up with my rent account cleared and a smaller amount of money paid to me.
However, I’m concerned that this could potentially be viewed as ‘favouring a creditor’ by the Official Receiver, which could possibly lead to the application for the DRO being rejected.
The other scenario I’m pondering is if the DRO was put in place and then the compensation offer accepted, would the landlord still be able to deduct the arrears from it or would they be obligated to pass the full amount to me, something as above which wouldn’t push me over the £2k assets / cash limit.
Many thanks in advance for any advice given.
Situation is I am in debt to the point DRO application is imminent and unavoidable.
Amongst my debts are some rent arrears due to a social landlord.
There have been issues with the property which are finally getting resolved but only after a lengthy and protracted struggle which led to my raising a formal complaint.
As part of this, the landlord has just offered compensation which whilst not small change, isn’t enough to breach the combined asset / money £2k limit for a DRO.
Where it’s complicated is as follows:
The landlord has a policy of deducting any arrears from sums of compensation.
They are aware of my current financial situation and have urged me to accept the offer of compensation and so the above would apply - I would end up with my rent account cleared and a smaller amount of money paid to me.
However, I’m concerned that this could potentially be viewed as ‘favouring a creditor’ by the Official Receiver, which could possibly lead to the application for the DRO being rejected.
The other scenario I’m pondering is if the DRO was put in place and then the compensation offer accepted, would the landlord still be able to deduct the arrears from it or would they be obligated to pass the full amount to me, something as above which wouldn’t push me over the £2k assets / cash limit.
Many thanks in advance for any advice given.
0
Comments
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What other debts do you have, it would help to give us context, as what you describe is not favouring any particular creditor, its a result of a complaint, not you been frivolous.
I can`t see any issue with it, I don`t know what @fatbelly might want to say about it?I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
I think you'll be ok because rent arrears are treated differently in a dro, provided you still live at the place where there are arrears.
There was a court case in the early days of dros where the court decided that payments in these circumstances were made to secure the accommodation, not preferentially pay the debt0
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