DRO Advice

Hello,

I was self employed until a couple weeks ago. My GP has recommended that I stop work, start new medication & treatment,, and apply for PIP. They don't really see me returning to full time work at all. In the most optimistic circumstance, I may be able to gradually return to part time. This could be 6 months from now. It could be 2 years from now.

I am concerned because I have about 10k in debt, solely in my name. My spouse's income will just cover the household bills and their own bills without me working. I can't see being able to make payments toward debt in the foreseeable future without full time work. Step Change's calculator recommends I make token payments and consider a DRO.

There is an obvious decline in income as I have had health difficulties for 2 months, but income didn't stop until two weeks ago when GP insisted. I've been living in an overdraft to get by this month. I am not sure how many months I need to show difficulty to apply? I am not sure what to do about creditors as I will need to tell them all in July, there's no way to pay for the foreseeable future. Should I contact them each and explain the situation?

I was self employed, but no longer employed. Can I apply through Step Change or do I have to apply through Business Debtline?

Thanks!

Comments

  • sourcrates
    sourcrates Posts: 28,717
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    Hi,

    Stepchange are a DRO intermediary, you apply through them, do you meet all the criteria ?

    Must not be a homeowner
    Less than 20k of debt
    No assets over £1000
    No car over £1000
    Must have £50 or less left after bills paid at month end (not including debt repayments).

    You don’t need to show hardship, just your circumstances, I don’t know what the waiting time is with sc at the moment, but they can usually be set up fairly quick.

    You can inform your creditors, but best to have the solution sorted first, debt collection takes a very long time, a few months won’t hurt.
    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
  • Thank you! I do meet the criteria now. I had about £60 left over in May. But now with work stopping, I am in the negative. I am just unsure how to prove my circumstances with them being so new. I have read some want several months of bank statements. I newly qualify, so only the past 2 weeks will reflect my situation.

    I have never missed a payment in my life, so I am terrified. I am gutted to have to do this, but my spouse and I have been going over the budget a million different ways the past 2 weeks and don't see another way.
  • Either can do it for you based on your situation however they will both request 3 months worth of your books or bank statements.


    Have you ended your self assessment or were you a limited company? Make sure for Stepchange that has all stopped if it hasn't it would be better to go through Business Debtline.


    Have you started a claim for benefits? It doesn't just cover JSA or Universal Credit you get help with council tax reduction etc even if your partner's income means you are not entitled to benefits. If you've paid your class 2 for NI for 6 months in the last 3 years you should get contribution based benefits. Get your claim sorted first, ask for breathing space from your creditors, pay them token payments each month.
    Take your time, even if your creditors go for a CCJ it's included in a DRO.


    It's up to you as it is personal but I would suggest making them aware of your health and this should mean you are taken out of the collections process unless you don't update them on a regular basis.
    If you are applying for PIP this website http://c-app.org.uk/ gives really helpful advice.


    Best of luck and your health comes first now so don't worry about your creditors anything they do would be included in a DRO.
  • fatbelly
    fatbelly Posts: 20,380
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    Good advice above. Keep us posted.
  • Update: Step Change have been very helpful. I was making it more complicated than it needed to be. I sent my signed documents, credit report, proof of income, current balances and addresses of debts this afternoon via email.

    Does anyone know what the process is from here? I received an instant reply saying it could take up to 21 days to hear back. Am I waiting for them to prepare my application at this point? Thanks!
  • sourcrates
    sourcrates Posts: 28,717
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    BeeHappy3 wrote: »
    Update: Step Change have been very helpful. I was making it more complicated than it needed to be. I sent my signed documents, credit report, proof of income, current balances and addresses of debts this afternoon via email.

    Does anyone know what the process is from here? I received an instant reply saying it could take up to 21 days to hear back. Am I waiting for them to prepare my application at this point? Thanks!

    They will process and submit your application when ready.

    The DRO intermediary at Stepchange does all the donkey work, the IS more or less just rubber stamp it.

    Takes a few days after submission, but your name will appear on the insolvency register usually within 48 hrs.
    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
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