Impact of earnings/work hours on DRO or bankruptcy.

Elliott500

So, here's my current situation

-Recently graduated, got a job in private sector paying 40k
-In 30k debt loans/credit cards from topping up student finance over the last 5 years
-Have no assets that would be seized
- Not working in finance sector, not likely to be running a business 

Decided to plan out the next 5-10 years and I have the objective of becoming debt free and getting a deposit down for a mortgage. Calculated that if I cut my spending to the absolute bare bones I can be debt free in three years and have saved a deposit in another three.

However, that's 6 years of pretty menial living. If instead I could get a DRO or become bankrupt then I can spend that 6 years building up the same if not more in a deposit and with the bonus of being able to enjoy my earnings.

Obviously I would prefer a DRO but ai know they can be pretty strict so bankruptcy is a fallback option. Currently I'm earning too much money to be elligable for a DRO, but I'm considering moving to a job in the public sector, which would pay about 14k less, which might put me in reach of a DRO. 

Will they look at my application and deny me because I took a paycut?

What happens if somebody takes a paycut or reduces hours to fall into the criteria, do they get told they should be in a higher earning job or to do more working hours?

stu12345_2

you can cut hours if you like.i wanted to go from full-time  to part-time in order to get a dro. but the CAB guy refused to forward my application.. he said that I would be under the threshold for a sustainable budget.
eg I couldn't afford even basic bills. so I would need to up my wages.but doing so would be a very fine balance to make it slot into the perfect £75 excess allowance per month max.

a dro suits someone on a fixed money eg disability allowance. that won't be getting wage rises or such.
the only prob with bankruptcy is you get a payment order that can last 3 years.meaning you give away all extra income and you get an allowance as to say to live on for 3 yrs 
so you won't be able to save for a mortgage or enjoy life for up to 3 yrs.
plus in a dro if you go over the £75 a month limit, even in the 12 month say. your dro will be cancelled and you are back to square one 

so I choose a self managed debt management plan with the idea to make reduced full and final offers at reduced prices on my debts. without the rules and regulations of a dro or bankruptcy 

plus student loans aren't written off in a dro nor bankruptcy. even tho you said your debt was bank loans credit cards
I assume you have student loans as you said student finance debt which is a burden
if I was you.i would work as much overtime as possible and clear the 30k debt as fast as I could without a dro. bankruptcy or changing jobs
you have a good wage.3 times more than what I earn ,forgot to say do you rent private or intend to. bankruptcy or a dro may  prevent you getting a let or renewal.
a DMP wont

the only folk that hassle you if you drop hours or not earn enough is the DWP when you make a claim for dole money. but you won't be in that situation 

sourcrates

You have to meet £75 monthly disposable income criteria in a DRO, also as mentioned above, bankruptcy would involve an IPA for 3 years on anything over £20 monthly disposable income, so your plan does not really hold water.

These options are designed for those who have unaffordable debts, its pretty menial living for a reason.

Put your plans on hold whilst you repay your current borrowing.

Martico

Agree - focus on your work and paying down the debt. The first may bring increased salary and opportunities, and the second will bring budgeting skills that'll stand you in good stead for the future.