DRO pre application worry.

fatbelly

Expenses are spilt in the same proportion as income. So if you earn 2/3 of the income, you take 2/3 of the expenses.

But you are worrying about something that the Intermediary will work out.

First things first, as RAS's post

in2deep_2

Income 
wages 2570 £50 already deducted for staff loan
UC 1600
CTC 300. Paid directly to Mrs

C cards £43500 mine, minimum this month 660
10k of the 43500 is with Cabot and I pay £10pm for a million years.
OD £900. Joint 
Staff loan £900. Mine

Rent 1175
council tax 257
tv licence 15
utilities 250 (last winter rose to 290) no contact
water 32
house ins 10
Prescription 9.58
dentist 16
Opticians 8.33
car 1 insurance 75
car 1 tax 37
car 2 insurance 17
car 2 tax 32
car 1 fuel/parking 250
car 2 fuel/parking 50
car 1 service/mot/maintenance 50
car 2 service/mot/maintenance 50
school uniform 41
school trips/clubs 10
groceries 1083
school meals 130
house maintenance 20.83
tabaco 60
vets bills 1 cat 1 dog (health issues and claim) 69
home phone/internet/tv (contract) 83
mobile 139 ( 6 phone sims 2 handsets) 
hobbies/sport/leisure 95
gift fund 166.67
clothing/footware 100
toiletries 70
hairdressing 40

No assets, car 1 I’ve had 14years car 2 for 8 years both nothing more than scrap value (£600 each)


Please be aware I’ve (obviously) never correctly complied a month by month budget and step change have helped me through much of it to complete this list with things I’d never even though of.

we are a family of 7 + 1cat 1dog

step change did a income/expenditure split calculation for just my debt solution that left me with 39.83, for technical and personal reasons Mrs won’t be included in any debt solution, her personal named debt is less than 1500.(she does know all this)

I should also point out that this is our first ever month on UC having transitioned from legacy benefits, I’ve no idea if that amount continues every month as It would seem you don’t find out until a few days before it comes.

RAS

You need a proper SOA  with the full list of debts and the calculations in. Go to SOA Calculator (lemonfool.co.uk) and format that for MSE, then block and copy here.

Meantime, I'll make a few comments about your post.

RAS

in2deep_2 said:

Income 
wages 2570 £50 already deducted for staff loan If you've not paid the other debts this month, you need to pay more off the work debt this month.
UC 1600
CTC 300. Paid directly to Mrs

C cards £43500 mine, minimum this month 660 We need the full list
10k of the 43500 is with Cabot and I pay £10pm for a million years.
OD £900. Joint Hopefully, you've now transferred your salary and UC to a new bank account? And either taken you name off the old account, or your wife has opened her own new account?
Staff loan £900. Mine

Rent 1175
council tax 257
tv licence 15
utilities 250 (last winter rose to 290) no contact - what do you mean about contact? I'd put £290 in for this year
water 32
house ins 10  - presumably you mean contents? Is this really enough to cover the goods for a family of seven? If you underinsure they won't pay out if there is a disaster.
Prescription 9.58
dentist 16 are you all NHS funded?
Opticians 8.33
car 1 insurance 75
car 1 tax 37
car 2 insurance 17
car 2 tax 32
car 1 fuel/parking 250
car 2 fuel/parking 50
car 1 service/mot/maintenance 50
car 2 service/mot/maintenance 50
school uniform 41 
school trips/clubs 10 - this doesn't seem a lot if your children are all in school?
groceries 1083
school meals 130
house maintenance 20.83
tabaco 60 - you may not be allowed this as an expense in a DRO, check
vets bills 1 cat 1 dog (health issues and claim) 69
home phone/internet/tv (contract) 83
mobile 139 ( 6 phone sims 2 handsets) 
hobbies/sport/leisure 95
gift fund 166.67
clothing/footware 100
toiletries 70
hairdressing 40 

Nothing for a holiday?

No assets, car 1 I’ve had 14years car 2 for 8 years both nothing more than scrap value (£600 each) In which case, use anything you got left over to put in an emergency fund.  You are inevitably going to have to replace one of these.

Please be aware I’ve (obviously) never correctly complied a month by month budget and step change have helped me through much of it to complete this list with things I’d never even though of.

we are a family of 7 + 1cat 1dog

step change did a income/expenditure split calculation for just my debt solution that left me with 39.83, for technical and personal reasons Mrs won’t be included in any debt solution, her personal named debt is less than 1500.(she does know all this)

I should also point out that this is our first ever month on UC having transitioned from legacy benefits, I’ve no idea if that amount continues every month as It would seem you don’t find out until a few days before it comes.

A few points to clarify and suggestions. 

fatbelly

Council tax seems high. What's going on there? Any Council Tax Support? You know it's not part of UC so you have to make a separate application to the council?

Your first payment of UC may not be what you will get going forward. I assume that CTC payment was the final one?

Are we saying that car 1 is yours, car 2 your wife's? Are you happy that both will survive the next couple of years? It may make sense to get at least one better car. Note that the value limit in a DRO is now 4k, whereas you can only hold 2k in cash and other assets. Both seem very high on road tax. My last two cars were £20 and zero for the year, and both worth <3k.

If you stop paying the credit cards, can you clear the overdraft in the next few months?

in2deep_2

fatbelly said:

Council tax seems high. What's going on there? Any Council Tax Support? You know it's not part of UC so you have to make a separate application to the council?

Your first payment of UC may not be what you will get going forward. I assume that CTC payment was the final one?

Are we saying that car 1 is yours, car 2 your wife's? Are you happy that both will survive the next couple of years? It may make sense to get at least one better car. Note that the value limit in a DRO is now 4k, whereas you can only hold 2k in cash and other assets. Both seem very high on road tax. My last two cars were £20 and zero for the year, and both worth <3k.

If you stop paying the credit cards, can you clear the overdraft in the next few months?

Cars, ultimately both are registered to me as is the insurance, Road tax is high as they are old cars and on the old rate system.

I don’t qualify for council tax support in my area.

I made an error with CTC, it’s not, it’s what use to be called family allowance, it’s in my wife’s name and paid directly to her.

We are in the process of swapping Direct debits and income to the new account.

Utilities, I ment to say I’m not under a contract, I will adjust to £290

contents insurance says £75k ??

Dentist I go twice a year and almost always end up spending £50-80 (nhs) 

I may have underestimated schools in general, two pairs of shoes just last week was over £100

Tobacco would half that be ok, I did overestimate.

Holiday?? I’d assumed this wouldn’t be an allowed expense.

Stupid question: do I have to miss payments or default before going into a DRO.?? I’ve not used any credit for about 3 weeks ( a record for me)

Does my bank account need to be squeaky clean before I submit my statements.
I’ve never budgeted correctly any my account is messy.

Staff loan: if there’s anyway I can clear this before hand I will BUT will ‘they’ check my income with HMRC and contact my employer for verification or just reply on a copy of my wage slip.? MW say the slip must include my address but it doesn’t.

One more thing, I’ve begun filling out the MW web forms, as I progress the forms can’t be reviewed/changed or seen?? I’m guessing I get a chance to review before official submission??

Grumpelstiltskin

OK Stop rushing into a DRO, sort everything else out first, stop paying your debts and save as much as you can into an emergency fund, you won't have access to credit so you need a back up for when something breaks down, as it will.

Rushing into a solution before you know exactly what you are doing and what the consequences are is as bad as being in a mess with your payments.

Nothing terrible is gong to happen, slow down and sort yourself out first.

in2deep_2

Thanks I understand that, but do I need to have missed payments or be in default.??

RAS

You don't need the defaults if you are going for a DRO.

But please slow down.

You need to separate out your finances from your wife's, otherwise you wreck her credit rating. If you do a DRO, the joint overdraft becomes her sole debt, with the complication that her credit record is affected because of the joint account. So either get your name taken off it, which the bank may refuse, or stop paying your other creditors and "give" your wife some or all the UC that MW says is hers. So she can clear the OD and close old account. 

And also clear that debt to your employer. 

These are the two debts that can come back and wreck your plans. You know the missus is going to have to sort out the OD when you go DRO. Help her sort it now.

You can guess your employer's not going to be best please if they are informed you're not repaying the debt because of a DRO. And you can't pay them without risking the conditions of your DRO (not favouring anyone).

The situation with the kid's shoes suggest you've not sat down with the last 6 month's statements and allocated each payment to a category in the Statement of Affairs? You need to do that to understand your finances.

It also suggests your clothing and shoes budget isn't high enough? You can get away with chazzers for clothes, and some pass downs within the family but the kids need new undies and shoes. Does their school have a uniform exchange as otherwise you may need to account for new uniform for the older ones as well? They need clean dry warm (or cool) clothes, not the latest fashion.

 As a family, you all have to learn to live within your budget, not on what you want now, but what you need over the next year.

Stop paying all the other creditors and get those two debts sorted. 

The sky won't fall in. You'll get texts, calls and emails. It's unlikely that anyone will issue a default in the next six months, though you'll get letters saying that you have defaulted on payments. Some will take 18.months.

in2deep_2

Thanks I am taking my time to sort a new account and get things sorted, I just like to know these questions before I commit to anything.