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Question re: DRO and mobile phone contract.

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Question re: DRO and mobile phone contract.

edited 30 November -1 at 12:00AM in IVA & DRO
7 replies 3.5K views
Queen_of_OmegaQueen_of_Omega Forumite
5 posts
edited 30 November -1 at 12:00AM in IVA & DRO
Hi everyone,
I am in the process of applying for a DRO and am in two minds as to whether to include my mobile phone contracts.

I will struggle to pay them on the reduced income my husband and I are now receiving, but my concern is if O2 would then turn round and demand the actual handsets back, leaving us totally scuppered as we couldn't afford to buy new phones!
If they do, then I would have to leave the contracts off the DRO and just struggle along until they're up, which is anything up to 18 months at present.

Can or will O2 do that, does anyone know?

Many thanks,
Queen.

Replies

  • fatbellyfatbelly Forumite
    15.6K posts
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
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    I'm not that familiar with how mobile phone contracts are constructed. I would have thought it would be difficult for them to get the handsets back even if they had a legal right.

    If you do put the contracts in the DRO you should either wait for the termination charges to be applied, or accurately calculate what they will be.
  • Thanks for your reply.

    I believe the termination charges would be the entirety of what's left to pay on the contract, or so I have that completely wrong?

    I'm really not sure at all. This is such a stressful thing to go through!
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K posts
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    Hi there and welcome to MSE,


    If you no longer want the phones and want to include them in the DRO, you can call the provider and end the agreement and get the final bill. You are right that you will owe the full amount remaining on the contract, so the other factor to consider before doing this, is would this debt take your total debts over the £20,000 limit.


    With regard to the handset, you should be able to keep them. Check your agreement, as some providers do split the contract into a loan for the handset and a contract for the minutes/ allowances. Even in this situation, the loan is normally a 'fixed sum loan agreement' meaning that they cannot actually repossess the handset. The only issue could be if the handset is subject to a hire purchase agreement, which is most common from places like Bright House and Perfect Homes.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Hi Laura, thanks for your reply.

    The contracts are split into handset cost and the airtime plan, but it's just getting that much harder to scrape by.

    It was all done online so I don't have hard copies of the agreement, hopefully I can find them on the website or saved in my email and I'll go from there.

    Also, most of the debts are in my name except for a loan which was jointly done with my husband. What happens in this situation with a DRO?
  • Sorry to double post but I've just found the credit agreement and it says it's a fixed sum loan agreement. Going through it quickly I can't see anything about having to return the handset but I could be missing something. Would it be okay if I posted it here for someone to look over?
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • National_DebtlineNational_Debtline Organisation Representatives - Private Messages may not be monitored
    8K posts
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    Hello again,


    So, if the phone agreements are a fixed sum loan agreement, they should be able to be included in the DRO and there shouldn't be any issue of needing to return the handsets. The key issue would be finding out how much is owed on the remainder of the contracts.


    With regard to the joint loan, it will create joint and several liability, which means you are both responsible for 100% of the loan separately and together. So, your liability would end if you entered a DRO but unfortunately, your husband would still be liable for 100% of the loan.


    Laura
    @natdebtline
    We work as money advisers for National Debtline and have specific permission from MSE to post to try to help those in debt. Read more information on National Debtline in MSE's Debt Problems: What to do and where to get help guide. If you find you're struggling with debt and need further help try our online advice tool My Money Steps
  • Hi i was wondering if anyone can help me. I'm entering into a dro an was wondering if i will be able to use my handset. As I'm in refresh contract with 02 its been include in the dro. Now i know i can get a sim only an keep my number but what I'm not sure about is if the block the phone? If that is the case i won't have a phone. Anyone had similar issue?

    Lins
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