DRO, Self-Employment & Universal Credit Query

Cheshire_cats_

I have almost £32,000 worth of debt, some dating back over 20 years which I've not been able to pay. After burying my head in the sand for years, I finally dealt with it and now have a DRO in place that ends next June. My intention was always to pay my debts, but circumstances didn't allow. I'm a single parent, and was a full-time student until this summer. Now the DRO is in place, I have a dilemma or two and am not sure what to do for the best.

I have recently qualified in the field that I was studying in and have started up my own business which, to date, hasn't made me any money but this is normal in my field, the earnings can be sporadic for the first couple of years, and always fluctuate going forward. I'm currently in receipt of Universal Credit and have a shortfall of around £280 pm for my outgoings. My daughter will only be in full time education for another year or two at which time, I'll have to come off Universal Credit completely and be able to support us both. (With some help from her if she's working.)

I have been thinking of returning to Uni to complete one more year of study and will move over to student finance combined with less Universal Credit. This will cover the shortfall in my outgoings but not take me over the DRO's requirements as my outgoings will be more with travel, books, etc. The downside is that I will have to put my business on hold and by the time I finish my studies, Universal Credit will expect me to be earning a full-time wage as I've already had (this year) the one-year minimum floor grace period for new businesses. If my business doesn't get up and running immediately (which it might not do anyway), I'll have to move away from my dream job and what I've trained for, just to met UC's criteria but I'll be debt free.

Alternatively, I can try to build my business while also at Uni working evenings and weekends in the hopes that by the time Uni finishes next summer, I'll be earning enough to satisfy UC's minimum floor but this might (if my business is successful) mean my income is too much for the DRO and it would end. I don't have a problem with this per se, I'm obviously willing to pay off my debts if I can it's just that if the DRO ends and my business income then becomes sporadic which is likely, I'll be back to square one but unable to apply for another DRO.

I don't know if I can move from a DRO to an IVA if my income increases or if I even need to tell the Insolvency Register of an increase in income when it's unlikely to be consistent. I don't know what to do for the best. 

I don't particularly want to do another year of studying, I want to focus on building my business, and am only considering it because of the DRO and Universal Credit expectations. 

Any advice?

sourcrates

How much of your debt was 20 years old?

Where you aware of the limitation act that means any unpaid debt you have not paid anything towards will be statute barred after 6 years, and you would not have to pay it?

Anyway that`s bye the bye now.

Its impractical to move from one insolvency solution to another, the DRO is only for 12 months, an IVA can last 7 years or more in some cases, and an IVA  is unsuitable for you anyway.

Ideally you need 12 months of stability with no large fluctuations or changes for your DRO to complete, so your strategy should be to maintain that status quo until it completes, you will then be free to do as you wish.

Cheshire_cats_

Thank you for the info.

The majority of my debt is from over six years ago but occasionally the companies have written to me about it. Like you say, it doesn't matter now.

I have no choice but to either put time into my business and start earning minimum wage as per UC's criteria which will take me over the income I need for the DRO to continue, or, I need to return to being a student which shouldn't take me over the £75 excess but will put me in a tricky situation after the DRO in terms of my income for Universal Credit. I don't think there's an easy solution either way but becoming a student again seems like the better option in the short term. 

Thanks again for your help.

RAS

Cheshire_cats_ said:

The majority of my debt is from over six years ago but occasionally the companies have written to me about it. 

That is irrelevant.

Have YOU paid anything towards the debt in the last 6 years, or made a written acknowledgement? Or has there been any 6 years in the last 20 years when you didn't pay or acknowledge the debt?

You need to check that for each of the debts in the DRO.

Assuming that you are in England or Wales, lack of payment or acknowledgement would render the debt statute barred. That doesn't mean the the debt doesn't exist but that the creditor can't pursue debt collection via the courts, so effectively you no longer need to pay.

In Scotland, the relevant period is 5 years and the debt is void, not just unenforceable.

So if you've been paying the odd fiver every couple of years, you've kept the debt enforceable. But some might be unenforceable.

Cheshire_cats_

No, I haven't paid or communicated with them at all in that time. 

stu12345_2

well it's a game you choose how you want to play it and if it's statue barred and they go for a ccj, then that's your defence you put in your letter before action response