DRO and a cleared debt

edited 30 November -1 at 1:00AM in Bankruptcy & Living With It
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maxmycardagainmaxmycardagain Forumite
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edited 30 November -1 at 1:00AM in Bankruptcy & Living With It
I was looking (idly) over the DRO information and saw a question..

"Have you paid off any debt in the last 2 years by a lump sum"

If such a payment dropped outstanding debts under the DRO maximum of £20K would/could a DRO be refused?

I note it says "have YOU" paid any debt, if a 3rd party paid it is it still viewed as if the applicant had paid it?
Dont worry, be happy

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  • debt_doctordebt_doctor Forumite
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    Such a payment would cause an issue if it was a payment that was higher than an agreed payment. If the potential DRO applicant wanted to reduce their debt to below £20k then they would have to spread such a lump sum payment fairly over all of the creditors.

    The DRO legislation has no power to hold a DRO applicant responsible for the acts of a third party, and third party payments would have no effect upon the application (other than to reduce the debt).

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
  • maxmycardagainmaxmycardagain Forumite
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    1. Such a payment would cause an issue if it was a payment that was higher than an agreed payment. If the potential DRO applicant wanted to reduce their debt to below £20k then they would have to spread such a lump sum payment fairly over all of the creditors.

    2.The DRO legislation has no power to hold a DRO applicant responsible for the acts of a third party, and third party payments would have no effect upon the application (other than to reduce the debt).

    DD

    Ref 1. The guy has had a call over a debt of £1750 and the DCA has given a settlement figure of £1300 thereby saving £450 off the intial figure (and another of £50 to clear a £100 debt).

    Ref 2. Seems to be in direct conflict with "1"? if "2" is right and trumps "1" there shouldnt be any issue if the guys parents make the payment?
    Dont worry, be happy
  • edited 30 August 2019 at 10:53PM
    debt_doctordebt_doctor Forumite
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    edited 30 August 2019 at 10:53PM
    Ref 1. The guy has had a call over a debt of £1750 and the DCA has given a settlement figure of £1300 thereby saving £450 off the intial figure (and another of £50 to clear a £100 debt).

    Ref 2. Seems to be in direct conflict with "1"? if "2" is right and trumps "1" there shouldnt be any issue if the guys parents make the payment?

    Your conclusion to point 2 is spot on - no control of a third parties actions.

    DD
    Debt Doctor, Debt caseworker, Citizens' Advice Bureau .
    Impartial debt advice services: Citizens Advice Bureau Find your local CAB *** National Debtline - Tel: 0808 808 4000*** BSC No. 100 ***
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