DRO - Paying off part of my debt to meet criteria

Genie10

Hi all,

I meet the criteria for a DRO except my debts total £70,000.  The maximum limit for a DRO being £50,000.  I could borrow £20,000 from family to bring me under the limit.  Is this frowned upon?  I have read that I could be refused a DRO if I did this. 

Does anyone have any experience of this?

Many thanks.  

Keep_pedalling

You would still have debts of £70,000 as the family loan is still a qualifying loan. 

Brie

Paying any one/two/three creditors off would be considered preferential treatment and would get the application rejected.

Borrowing from a family member is just transferring the debt from one creditor to another so doesn't really get you further ahead.  Of course the family member's loan wouldn't be noted on your credit history but paying off credit cards etc would be and likely will raise questions and again a possible rejection.  Whether it would be obvious in a couple of years time may depend on the scrutiny your history is given.

If it was an all out gift or an inheritance would be a different matter but you might require proof of this.

fatbelly

DROs cover up to £50k. Bankruptcy has no limit.

What is your objection to bankruptcy?

Family could help with the £680 fee. That is allowed

ManyWays

I think @fatbelly has suggested a better option. 
In case you are wondering, a DRO and bankruptcy have exactly the same effect on your credit score. And you can still get a mortgage after either after 6 years when they are off your credit record (provided you have saved up a deposit of course).