Considering a DRO

kenziequeen123

Hello,

I am considering a DRO and have some questions regarding it. 

1. I am up-to-date with my mobile provider contract (EE & Sky) and husbands, will this be revoked when I submit the DRO if I continue to pay?

2. I am on a Sky Stream subscription for watching TV, would this be closed as part of my DRO too if I continue to make payments?

3. I do have bad spending habits unfortunately which has lead me to this route, I just want a fresh start and learn from my mistakes. A DRO would force me to budget properly - is this a situation that would lead to DRO rejection? 

sourcrates

No, no and no, is the short answer.

Nothing is closed or revoked, this is not bankruptcy, you remain in control of everything else.

But the bad spending habits must end, if they don`t, and you accrue more debt, your DRO can be revoked, so you must be super clear on what is expected of you.

You must meet all criteria for a DRO the most important bit is having less than £75 disposable income at month end (not including any debt repayments).

kenziequeen123

Thank you for your response - and yes I agree, I need to sort out my spending habits. Hence going forward, I won't accumulate more credit nor do I intend to apply for credit for a very long time! 

I have used credit in the last month though, how should I go about this? Obviously I need to stop which I'm going to do. But do I wait a bit before applying for the DRO? Do I make small payments to each lender, or pay nothing at all now? (Question because of favouritism or whatever it's called). I know I can't make the minimum payment with every lender. 

kenziequeen123

And in this instance, would I include EE / Sky in my DRO debts? Or would I not include them since I wish to continue paying them and keeping my services? Thank you. 

kenziequeen123

Sorry to keep adding responses, questions just keep coming up, I've never done this before and like many people on this forum, I'm an overthinker.

This question is actually from my husband because he's debating some sort of DMP or DRO too - would ClearPay be affected by the DRO if we continue paying them as normal? ClearPay is basically our go to for emergencies like if we need a new washing machine due to old one being broken, etc. 

Grumpelstiltskin

Forget Clear Pay, you need to have no credit at all. You need to stop paying all unsecured debts and save as much money as you can for an Emergency Fund to cover you when things break down, you should  have no access to credit when in a DRO or DMP.

You need to budget to manage with no credit at all.

kenziequeen123

I have some furniture through finance with Creation (DFS and Currys) which are still outstanding - where do I stand with the furniture, will it have to be returned? 

sourcrates

OK, your phone, sky etc, are allowable expenses in a DRO, as long as you keep up with the payments, nothing changes, they do not need to know, and you don`t need to include them as debts.

Guidance dictates that you should treat all creditors equally, in reality, the best way to do this is not to pay anything at all to the debts that will be included in the DRO.

You will have no access to credit, for at least 12 months, possibly up to 6 years (with a DRO on your credit file).

So its important to use the money you would have sent to lenders, as an emergency fund, remember, you can have up to £2000 in assets in a DRO, that includes cash, pre-planning avoids a lot of issues further down the line.

If you do opt for a DRO, make (as certain as you can) that your home situation is likely to stay as it is for the duration of the moratorium period (12 months) as any increase in income, or a dividend/windfall of some kind, can result in it being revoked.

Your furniture will not have to be returned, the debt is just added to your arrangement.

kenziequeen123

sourcrates said:

OK, your phone, sky etc, are allowable expenses in a DRO, as long as you keep up with the payments, nothing changes, they do not need to know, and you don`t need to include them as debts.

Guidance dictates that you should treat all creditors equally, in reality, the best way to do this is not to pay anything at all to the debts that will be included in the DRO.

You will have no access to credit, for at least 12 months, possibly up to 6 years (with a DRO on your credit file).

So its important to use the money you would have sent to lenders, as an emergency fund, remember, you can have up to £2000 in assets in a DRO, that includes cash, pre-planning avoids a lot of issues further down the line.

If you do opt for a DRO, make (as certain as you can) that your home situation is likely to stay as it is for the duration of the moratorium period (12 months) as any increase in income, or a dividend/windfall of some kind, can result in it being revoked.

Your furniture will not have to be returned, the debt is just added to your arrangement.

And being I recently used credit in the last month, should I wait to do a DRO or shall I do it as soon as possible? 

Or should I wait to default on my credits?

kenziequeen123

I just created an SOA to post here if somebody could look over it and ensure I'm eligible for a DRO

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Monthly Income Details[/b]

Monthly income after tax................ 0

Partners monthly income after tax....... 0

Benefits................................ 698.87

Other income............................ 0[b]

Total monthly income.................... 698.87[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 0

Secured/HP loan repayments.............. 0

Rent.................................... 75

Management charge (leasehold property).. 0

Council tax............................. 0

Electricity............................. 50

Gas..................................... 50

Oil..................................... 0

Water rates............................. 0

Telephone (land line)................... 0

Mobile phone............................ 91.41

TV Licence.............................. 0

Satellite/Cable TV...................... 0

Internet Services....................... 52

Groceries etc. ......................... 200

Clothing................................ 10

Petrol/diesel........................... 0

Road tax................................ 0

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

Car parking............................. 0

Other travel............................ 32

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 32

Buildings insurance..................... 0

Contents insurance...................... 0

Life assurance ......................... 0

Other insurance......................... 0

Presents (birthday, christmas etc)...... 15

Haircuts................................ 5

Entertainment........................... 30

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 642.41[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 0

Shares and bonds........................ 0

Car(s).................................. 0

Other assets............................ 0[b]

Total Assets............................ 0[/b]

[b]

No Secured nor Hire Purchase Debts[/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Aqua...........................1055.8....43.79.....34.9

Capital One....................499.12....15.21.....34.9

JD Williams....................1789.68...71.58.....44.9

Halifax Overdraft..............181.33....0.........39.9

Creation.......................1495.8....96.19.....29.9

Argos Credit Card..............358.39....17.91.....34.9

Very...........................493.98....34.58.....59.9

Littlewoods....................499.......38.4......39.9

Fashion World..................148.49....5.94......44.9[b]