Advice on SOA for DRO please

bdl23xx

Hello

It took me several weeks to face my debt and trawl through statements to make an accurate SOA. I was intending to get a DMP but spoke to Debt Camel on Instagram who said I should be looking at a DRO. Would appreciate any advice on the figures, have written in brackets on the ones that I am concerned may not be accepted). I can't find a list of what is an acceptable amount for anything.

My credit cards are on £17k due to reduced income (health issues stopping me working a few years back, which looks like it may be permanent)… interest on 1 card went up to 45.9% which contributed to things getting out of control. I took out a few small balance transfers when I could over the last few years but they are ending in the next few months and my credit rating is so low I can't get any more. Last year I began putting part of the rent or food shops onto a credit card to free up the money to be able to make the minimum payments (around £300pm), so the debt just got higher. I feel like I am stuck in a swirling tornado with no way out, my depression and anxiety have got so bad I fear a 3rd nervous breakdown is looming.

I used advice in other posts and opened a Zopa account and set up pots to be able to put money aside for things like haircut, clothing etc so future me is organised. I also opened a basic bank account as mine will close with a card attached. The posts have been so useful and people so kind sharing advice.

I have tried to read as much as I can about getting a DRO, I saw a comment that said it won't be accepted if you are still spending on the cards, which I am doing to make the minimum payments, the comment said don't spend on them for at least 3 months before applying for a DRO, is that true? Do I stop making the card payments or cut back on food, heating, medications? (I also have a circulatory disease so I'm supposed to stay warm). I can't figure out how to do this. My other question is are your bank statements checked because if something on the SOA is too high, am I allowed to add the amount to something else?

I haven't had more than 3 or 4 hours sleep for weeks now with the worry, I'm running on empty, so really appreciate any advice or direction so I can start tackling this nightmare I am in. Thank you.

INCOME

Universal Credit with limited capability for work £1221

OUTGOINGS

Rent £491

Food £300 (Too high? Have bowel disease, hernia, messed up digestion, allergies, intolerances)

Medical £30 (Over the counter meds & vitamins that help with multiple heath issues)

Toiletries £16 (Higher because of medical/menopause issues)

Household £20 (Breakages/replacements)

Transport £44

TV Licence £15

Water £27

Life insurance £14

Council Tax £13

House Contents Insurance £6

Electric & Gas combined bill £85 (I did get winter fuel allowance so this spend is on top of that)

Internet £32

Mobile £10

Printer Ink subscription £4

Clothing £15

Gifts £15

Entertainment £16

Hobby £10

Holiday £15 (saving for train & hotel to go to Niece's wedding in August)

Haircut £10

Emergency Fund £25

TOTAL £1213, leaves £8 "spare"

EDIT: I have called CAB Debtline this afternoon and they have made me a telephone appointment for next week. Thank you :)

ManyWays

The expenses look reasonable to me, indeed you could be spending a bit more on clothes. The allowances in a DRO (or DMP) are more generous than people often assume.

As you are on UC, you may be able to reduce your broadband bill a bit:

https://www.ofcom.org.uk/phones-and-broadband/saving-money/social-tariffs

that won't make any difference to a DRO application, but it is something you could look at now, or afterwards.

I saw a comment that said it won't be accepted if you are still spending on the cards, which I am doing to make the minimum payments, the comment said don't spend on them for at least 3 months before applying for a DRO, is that true? Do I stop making the card payments or cut back on food, heating, medications? 

I do not know if this "3 months" is a firm rule. But the idea is that you treat all your creditors equally, and in this case you stop making any payments to them at all, so you no longer need to spend on the cards. Talking to a debt adviser now about a DRO is a good idea and they will explain all of this.

bdl23xx

Thank you, I heard recently about the social tariff on broadband, I'm currently in contract for another 18 months but will switch to that when the contract ends. Maybe I should talk to Citizens Advice now then…

RAS

You really should not be paying anything towards unsecured/non-priority debt if you are on UC.

That's not a rule, it's just vital for your health, welfare and survival. So stop paying now. Try and build a few quid in a savings account. You can have at least £2k without worrying about the DRO.

If you want to plan, start by editing any contact details. Remove your phone number, and maybe create an email that you never visit.

CAB are able to do DROs, so make an appointment now.

And please be kind to yourself.

sourcrates

Everyone`s budget is different, as we all have differing needs, the important figure is the £75 disposable income figure, you must be at or below that in order to be accepted.

What you actually spend money on is not really that important, you just need to be within the limits they specify.

Oh, and stop paying the debts, its wasted money.

bdl23xx

https://forums.moneysavingexpert.com/discussion/comment/81890008#Comment_81890008

Thank you for your kind words, I don't look after myself well at all. When you say edit contact details, remove phone number etc, from where, sorry I don't understand what for?

EssexHebridean

From your accounts with the people you have debts with. That restricts the methods they can use to contact you, which is turn reduces stress. You can insist on all contact coming via letters in the mail if you want - and they have to honour that.