Dro

Hi
I am new to the forum and would like advice please.
Like many others I am at my wits end worrying about my debts. I am fully maxed out on credit cards for £18500 but I also have £7000 outstanding on my Amex charge card. As you know the charge card has to be settled in full every month but a couple of months ago I had to hold my hands up and advised Amex the problem. As I have held the card for over 20 years they proposed a payment plan to help pay the debt off in due course which I have started paying. However I am now in a situation where I can’t pay the minimum on my credit cards and a friend suggested I look into a DRO which I admit I did not know about. I fit the criteria for the balance of my credit card debts as they are under the £20,000 limit. My question is would I be able to get approval for the DRO on my credit cards and leave the payment plan with Amex to run separately or would the £7000 owed to Amex have to be added bringing the total over the £20,000 limit and therefore the DRO would not be approved?
Any help or guidance would be really appreciated as I don’t know which way to turn.

Comments

  • sourcrates
    sourcrates Posts: 28,717
    First Anniversary Name Dropper First Post Photogenic
    Ambassador
    Hi,

    I fear you will fail with the amount of debt you have.

    Debts that are excluded from DRO include:
    • All student loans (old and new style)
    • Magistrates' court fines
    • Debts to the child maintenance service or CSA
    • Social fund loans
    • Criminal fines (including debt incurred under the Proceeds of Crime Act)
    • Claims against you for damage or personal injury
    • TV Licence arrears
    I think charge cards are counted as credit cards, confirm it with stepchange, but i believe that is the case.


    Any reason why Bankruptcy has not been considered ?
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • Pippalab
    Pippalab Posts: 2 Newbie
    Hi
    Thanks for the reply. I haven’t looked into bankruptcy yet.
    I just wondered that as I have already established a payment plan with Amex whether Amex might turn around and say “we have a payment plan with you so will not become part of a DRO.”
    Obviously with the payment plan they will eventually get their money whereas the DRO will not benefit them at all.
  • ToxtethO'Grady
    ToxtethO'Grady Posts: 342
    First Anniversary Name Dropper First Post
    Forumite
    You're over the £20K limit doesn't matter if you have a plan with them, they're a provable debt and not excluded. A credit check would be requested by your intermediary and it would show up, they'd advise you not to go for a DRO as it would get rejected and you cannot apply for another 6 years.

    BR or an IVA/DMP might be your better option, speak to one of the free impartial debt organisations, Stepchange/National Debtline/ Citizens Advice to get their take after doing your income and expenditure.

    The money you are using towards the charge card could be shared out amongst the rest on an IVA or DMP
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