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DRO - Proof Of Income/Expenditure. Time Period Taken Into Account For Income and Expenditure.

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DRO - Proof Of Income/Expenditure. Time Period Taken Into Account For Income and Expenditure.

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Sir_DanalotSir_Danalot Forumite
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Hello all, I'd like to ask the following particularly to people who have been through the process of getting a DRO.

1) What time period is taken into consideration regarding my income and expenditure when applying for a DRO?  For example, are my  last 3 months bank statements/receipts needed?  Are a certain number of years tax returns needed etc?

2) Are the recent loans for self-employed people from the government due to Covid 19 taken into account when it comes to income?

3) What kind of evidence is required in regard to income and expenditure?  Are bank statements needed?  If money is withdrawn in cash to pay for household expenditure, are receipts needed?

4) For self-employed people with variable income, is projection of future potential profit/loss taken into account?
5) Are working Tax Credits taken into account?

Thanks in advance for any answers.  Answers to any of these points is useful even if you don't know the answer to them all.  I have already searched for a number of days to find answers all over the web and can see nothing about the specific points numbered above.  I have looked on the government website, Step Change, National Debtline, CAB and a few others.



Replies

  • JCS1JCS1 Forumite
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    You might be better off posting on the Bankruptcy Board, as there is a sub-board for DRO's and IVAs
  • edited 28 June at 10:48PM
    sourcratessourcrates Forumite, Board Guide
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    edited 28 June at 10:48PM
    Normally last two payslips if paid monthly, unsure about the self employed.
    Covid-19 has thrown up a few curve balls, so it’s unclear how any government relief affects a DRO.
    Fatbelly is your man to answer these questions for you, (CAB adviser) hopefully he will be along shortly, normally in the mornings.
    I’ll move your thread to the DRO board.
    I'm a Board Guide on the Debt-Free Wannabe, Credit File and Ratings, Bankruptcy And Living With It, boards. "I volunteer to help get your forum questions answered and keep the forum running smoothly".
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  • fatbellyfatbelly Forumite
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    Hello all, I'd like to ask the following particularly to people who have been through the process of getting a DRO.

    1) What time period is taken into consideration regarding my income and expenditure when applying for a DRO?  For example, are my  last 3 months bank statements/receipts needed?  Are a certain number of years tax returns needed etc?

    2) Are the recent loans for self-employed people from the government due to Covid 19 taken into account when it comes to income?

    3) What kind of evidence is required in regard to income and expenditure?  Are bank statements needed?  If money is withdrawn in cash to pay for household expenditure, are receipts needed?

    4) For self-employed people with variable income, is projection of future potential profit/loss taken into account?
    5) Are working Tax Credits taken into account?

    Thanks in advance for any answers.  Answers to any of these points is useful even if you don't know the answer to them all.  I have already searched for a number of days to find answers all over the web and can see nothing about the specific points numbered above.  I have looked on the government website, Step Change, National Debtline, CAB and a few others.



    Well, you're looking in the right places. There's a document called DRO a-z but I'm not sure if it is generally available. Looks like it's not, but the intermediary guidance notes are

    https://www.gov.uk/government/publications/intermediary-guidance-notes-v15-dro2-guidance-for-approved-intermediaries

    My take on  these are

    1. 3 months is reasonable but be guided by your intermediary

    2. Income directly related to covid is disregarded. Is that what you are asking?

    3. See 1

    4. No but if you exceed the criteria in  the moratorium period, the DRO fails

    5. WTC, if you are receiving it, is income


  • Sir_DanalotSir_Danalot Forumite
    24 posts
    Part of the Furniture 10 Posts Combo Breaker
    Thanks everyone who has replied so far.
    fatbelly said:
    Well, you're looking in the right places. There's a document called DRO a-z but I'm not sure if it is generally available. Looks like it's not, but the intermediary guidance notes are

    https://www.gov.uk/government/publications/intermediary-guidance-notes-v15-dro2-guidance-for-approved-intermediaries

    My take on  these are

    1. 3 months is reasonable but be guided by your intermediary

    2. Income directly related to covid is disregarded. Is that what you are asking?

    3. See 1

    4. No but if you exceed the criteria in  the moratorium period, the DRO fails

    5. WTC, if you are receiving it, is income


    Thanks, some useful info there.  I will take a look at the link in a few minutes.

    Point 2 - yes, I wanted to check if the grants due to C-19 would mess up the income and expenditure calculations and cause issues.

    Point 3 - do you mean I would need bank statements for proof (3 months)?  So if I was buying with cash I had withdrawn from my bank account,  I could not prove my expenditure to their satisfaction?  Or would it be ok to see the amounts I need to spend just withdrawn as cash?  I just want to make the process as simple as possible and have everything in place and easy to account for if I go ahead with applying for a DRO.

    Point 5 - WTC,  has increased recently due to Covid 19 for a year.  I suppose the income would be measured using the increased rate?



  • fatbellyfatbelly Forumite
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    I think for point 5, you refer back to point 2 - the extra income because of covid is disregarded.

    On point 3 there's no set rule, so you have to be guided by your intermediary, There will be internal policies at stepchange but I don't know what they are. I (at CAB) am being asked to see one bank statement. I don't think I am required to analyse it in forensic detail, though I might get picked up on that. If you had three months of bank statements I don't think anyone could ask you to be more helpful.
  • Sir_DanalotSir_Danalot Forumite
    24 posts
    Part of the Furniture 10 Posts Combo Breaker
    Thanks.  I have also now asked these questions and a few more by email to CAB.  
    It is strange though, as both the CAB and another service have told me that the self employed grant WILL be counted as income because it is supposed to be making up for the income I would have had if it were not for the virus.

    I am wondering if there is confusion on that point and if the person who emailed me from the CAB  has it correct or not considering you also work at CAB and say the opposite, so I wonder what's going on there?  

    Interesting point about the proof of income and expenditure.  I am trying to be as organised as I can so if can document my ins and outs as accurately as possible through bank statements, that would hopefully save everyone some headaches if I go ahead with applying for a DRO.
  • MalMonroeMalMonroe Forumite
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    I've had a DRO. It's all finished with now, 7 years later. 
    What you really do need to do is phone one of the Debt Help agencies. In my case, StepChange. They were excellent. And guess what, I did not need any proof of income whatsoever, from any source. What I needed was just a list of my incomings and outgoings which I read out to the adviser. Going from there, they do everything. If you want to take their advice, which most people do, you can just let them make the application for you and they list your debts as you have told them, you have to verify and sign and of course pay the £90 but StepChange will submit the application for you. That is the best way because all the debt help agencies are recognised as approved and an application submitted through them is more likely to be accepted than if you do it alone. In my own experience, contacting StepChange and speaking to the adviser was the best thing I could have done, she was so helpful and kind and the best thing is, nobody is judgemental. Many people shy away from contacting agencies because they are so embarrassed about the state they are now in. But being in debt is not a crime and mostly it's something that debtors have not done deliberately anyway. Don't worry about feeling guilty, that's the one thing that made me hesitate. Please stop emailing places and trying to second guess. Get on the phone. And I'd really recommend StepChange rather than CAB because CAB deal with lots of matters whereas StepChange is there just for debt. You have to phone. They'll tell you what proof, if any, you have to supply. Just take that first step, to StepChange! You will not regret it. But faffing about as you are, worrying and wondering, is no good for you at all. You'll never know until you speak to someone who knows what they're talking about, i.e. a debt help adviser. With the best will in the world, some people on this forum don't.
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