DRO Fee - Change in budget

EssexHebridean

Just been announced that the fee for obtaining a DRO is to be scrapped. Excellent news! 

fatbelly

Indeed! There's a surprise

But it's no surprise I hear it first from a poster on mse rather than my employer or professional body

Brie

fatbelly said:

Indeed! There's a surprise

But it's no surprise I hear it first from a poster on mse rather than my employer or professional body

Perhaps employer etc are waiting to hear if there is anything else relevant?  But it is good news - I was talking to someone about this the other day and they said they'd like a DRO but didn't know where they'd get the fee.

I'm still hoping the they'll raise the personal allowance above that of basic state pension.  that will hit a lot of people in a year's time.

EssexHebridean

fatbelly said:

Indeed! There's a surprise

But it's no surprise I hear it first from a poster on mse rather than my employer or professional body

I was stalking Martin's Twitter for his budget updates, and felt it was big enough news for us to be worth posting before fine detail was confirmed. 

Apparently it will be as from 6th April - so for anyone currently in the process, it might be worth holding off for a few weeks. 

fatbelly

Debt Camel is on the ball

https://debtcamel.co.uk/dros-changes-2024-budget/

Also

Raising the maximum total debt to £50,000

Someone over the limit has to go bankrupt instead. Bankruptcy has a much higher fee for the individual to raise and is much more expensive for the Insolvency Service to administer. Increasing this limit to £50,000 is very sensible. There do not seem to be any good reasons why someone with say £45,000 should have to go down the expensive route of bankruptcy if they have no assets that would be realised and do not have any spare income to make any monthly payments in bankruptcy.

Doubling the permitted value of a car

A car is essential for many people who need DROs. For example, care workers, night shift workers, and people juggling work and getting children to school may find public transport impractical. Bus coverage has got worse over the last ten years in many areas.

For these workers, a car is not a luxury. And one that is worth less than £2,000 is very often too unreliable and so too expensive to run. In London, it can be almost impossible to buy a second-hand car under £2,000 that passes the ULEZ rules,

As a result, the current £2,000 car limit can be a barrier to people choosing a DRO at present. They are left with a choice between an IVA where they cannot really afford the monthly payments or just making token debt payments forever and not getting a clean start.

A £4,000 limit is a big improvement for DROs.

Brie

@fatbelly
snap!  was about to post the same.  Brilliant.  things will be buzzing at work tomorrow!!!

sourcrates

That`s really good news, common sense at last.

Next step to abolish bankruptcy fee and make it a level playing field.

RAS

I'm so pleased.

There was a point in my life when I needed to borrow the smallest coin in the realm to buy a pint of milk, which would allow me to feed myself something until back-dated benefits paid out. And I'd been penalised for months because I worked most weeks rather than put in a continuous claim.

No way then, in the preceding year or the following year when I recovered from major surgery, would I have been able to fund the equivalent fee for a DRO. Although there was no way then that any financial provider would have loaned me anything. I was very good at hiding from my landlord on 5 week months. 

And that was very easy compared with the current regime.

fatbelly

This is the text from the budget:

3.41 To support households struggling with problem debts, the government is making it easier to access a Debt Relief Order (DRO). DROs are a personal insolvency debt solution for individuals who cannot pay their debts. At Spring Budget, the government is removing the £90 administration fee from 6 April 2024. The government is also raising the maximum debt value threshold from £30,000 to £50,000 and increasing the maximum value of motor vehicle that an individual can retain from £2,000 to £4,000, from 28 June 2024. These changes build on government’s record levels of funding for debt advice in England, meaning that more people can access debt relief and get a fresh start with their finances.