DRO Qs

thelibrarian11

I've had a DRO before, more than 6 years ago. I work freelance on top of full time hours, but if I stop, which I would love to do, I'm eligible for a DRO, which will include tax debt from freelancing.

1. If I wanted to work freelance during my DRO year (I don't, I've done 3 years of more than full time hours and I'm really tired), am I right in thinking I'd have to average out the money I get and if it means I've had more than £75 spare my DRO will fail? Could I do something like, say my expenses went up like a school trip here and an exploding washing machine there, and there's no overall difference?

2. If I did work freelance during that year, obviously I'm racking up a tax debt again for the next year - am I right that it's not included in the DRO because it's not been issued at the time I applied for the DRO? Could I say my freelance money during the DRO year will go towards that future tax bill and add that to the school trips exploding washing machine etc I'm still under £75 spare?

3. Is it really true that HMRC self assessment debt can be included in a DRO? It seems mad that I can earn the money and not be taxed on it. It all went into the air trying to keep up with unsecured debt and I didn't keep any aside for tax. 

4. I'm sure I did this last time, the DRO was for me only and my husband's finances and car weren't considered at all. Will they expect to see a contribution from him for the household expenses? I'm only at the less than £75 if I don't have a contribution from him. I'm sure they didn't last time but it was so many years ago I can't remember. Does it being a tax debt change any of this at all?

Thanks for all your help again. Anything you can tell me is really helpful, I struggle with overthinking and I've made myself a bit anxious recently with this. I'd love to just be able to get this all straight in my head and then my brain can put it down for a bit.

fatbelly

You still need to make a dro application through an intermediary so I suggest you start talking to one.

In the past 6 years, Stepchange have dropped out so your main choices now are CAB or Money Wellness.

Your intermediary will help to calculate your surplus, which will involve looking at both incomes and dividing expenses proportionately

Cars are very much considered, both their expenses and value as an asset. Your owned car has to be <£4k

Income tax is a qualifying debt, provided it is 'due and payable'. Obviously future debts aren't included.

Once you have a Dro, there's not a lot of checking

You don't say, but I presume you're in rented accom.

thelibrarian11

Yes in social housing, car less than 4k. Great yes, best talking to the advisor about all this, but if it is joint income/expenditure then I probably won't be eligible. But that's good to know it's more about that application phase rather than in the year after it, that's helpful thankyou.

fatbelly

Have a chat to someone soon. As well as the two organisations I mentioned, National Debtline are good as they do not have a product to sell.

johnjs88

I have a small question if someone doesn't mind helping me please.


I had a DRO go live on 13/2/2025, I receive a "final bill" from one of the creditors along with confirmation they've closed the account.

The "final bill" they sent has bumped up the so called balance from £727 to over £1200 due to an "Early exit fee" from the mobile contract.

Am I right in thinking because the account is in the DRO and the "final bill" was issued after the DRO went live that they have no recourse to pursue this?

sourcrates

johnjs88 said:

I have a small question if someone doesn't mind helping me please.


I had a DRO go live on 13/2/2025, I receive a "final bill" from one of the creditors along with confirmation they've closed the account.

The "final bill" they sent has bumped up the so called balance from £727 to over £1200 due to an "Early exit fee" from the mobile contract.

Am I right in thinking because the account is in the DRO and the "final bill" was issued after the DRO went live that they have no recourse to pursue this?

The debt vests in your DRO, doesn't matter the value as long as it keeps you below the 50k limit.

fatbelly

If they've closed the account because of the DRO then most creditors would understand that you are insolvent at that point and not try to collect the debt

johnjs88

The original creditors (EE) added a £465 contract termination fee on 3rd March 2025 and the debt collectors who has the debt right now added over £100 of admin fees.

Apparently moorcroft has not been made aware of the DRO so I have emailed it to them and informed them that the account is in a dro since 13/2/25 and all fees added recently are not legally withstanding

thelibrarian11

Can I check I've got things right in my head? I'm trying to see if I am actually eligible for a DRO. My husband's contribution to bills, will they just check my account for that, or will they check his? I could get him to contribute just enough to cover the bills making me eligible on the less than £75 spare aspect. Can I do that?

fatbelly

Your intermediary will want to know what each of you bring in so that they can allocate the expenditure proportionately.

For example, you earn 600, he earns 400.

You take 60% of the joint expenditure

thelibrarian11

Ah I see, will that be across just joint expenses, so my own things only would be assigned just to me?