Couple of DRO Clarifications Please

swwchris

I have been trawling through the DRO posts trying to find a definitive answer to a couple of questions regarding starting one. But unfortunately, I have surrendered and decided to post the questions myself, apologies if I have missed it somewhere

 

1.        I have a number of overdrafts which I have not serviced for at least six months other than my main Halifax account which has an overdraft of £490 and which I keep just below that amount and my four weekly pip gets paid into which generally takes the account back to a zero balance before I build the overdraft back up to max £490. The banks are calling in the overdrafts because no money is going through the accounts.

Question – If I get a DRO I assume it will include the Halifax account?

Will Halifax then close my account?

Would it be a problem if a family member put me back in credit and I removed the overdraft completely (always staying in credit), or would paying this one debt off cause a problem with the DRO application?

 

2.        I have been offered a settlement figure for one other bank account overdraft, which again its possible I can pay via a family member. Similar question, would paying the much reduced settlement figure affect the chances of getting a DRO?

 

3.        This question is probably reliant on the answer to question one, I have a couple of other bank accounts which I have never used but potentially wish to close, neither have any debt associated. Should I just leave these open, close them both or keep one open just in case my main bank (Halifax) close all my accounts?

 

Thanks for any help 

sourcrates

Why would you settle a debt prior to entering a DRO ?

That makes no sense does it, in insolvency, you must treat all creditors equally, so pay all of them nothing.

Include all the debts in your DRO, and assume any bank accounts subject to a DRO will be closed by the bank.

Switch your banking to one of your other accounts with no overdraft facility.

How much debt do you have in total, the maximum in a DRO is now 50k.

ManyWays

I agree with @sourcrates. Don't try to settle these overdrafts, just let them go into the DRO.

Also it is possible that any bank account that is not a bank account may be closed by the bank, as many banks do a trawl of all insolvencies and automatically close these accounts. So you may find you settle an overdraft only to have the account closed anyway.

Brie

overdrafts are debts the same as what you have with credit cards or loans or the bit you owe your uncle.  if you settle any of these it will be viewed as treating that creditor in a preferential manner.  doing this would mean the DRO application would fail.  So don't do it.

Stop using any account where you have an overdraft.  Use an account that has NO association to any bank that is related to any of your debts.  Manually transfer the payments you receive or DDs you make to the designated bank account that you will use going forward.  If you decide to open a new account do NOT move any transactions via the switch service.  

The information on the DebtCamel website gives everything in a nice clear way.  Might be worth a read!
What is a DRO (Debt Relief Order) ?

swwchris

Everyone thank you for your comments. 

I guess whats causing my anxiety is the thought of ending up with no bank account at all, is there a possibility that this will happen? Will/Is there a chance the couple of bank accounts with no default also end up being closed as a result of the DRO?

@Brie Sound like the way forward thank you