Budgeting for DRO

AmelieAva8 · 25 April 2018 at 7:18AM

Hello, I’ve been around forums for a while now trying to get on top of my debt but we just don’t seem to be getting anywhere. I have £400 in savings now but car is due MOT and service in August so that’ll use half of that.
(Car is worth £895 on Parker’s website) and I rent. No assets.
I’ve got a few questions about DRO it seems the best way forward for myself, with around £15 k debt and a tax credit over payment which I don’t know the full amount of yet I’m going to find out.

How many months bank statements do they need? I’ve done some over time in previous months (none this month or have any booked in the future) so previous pay slips have shown more, this isn’t sustainable for me to carry on and I only did to try and move more debt but it has an effect on trying to get childcare/more tired ect so I’m going to stop that but I just wondered what they might think about that.

2) I’ve done the debt tool through step change, they are sending me an info pack out regarding DRO but I put things like £40 activities (my two daughters do gym) £20 a month for presents, £50 for clothes for all 3 of us.. will these things be accepted as out goings? I had roughly £40 left over after all bills ect and I don’t want them to think that I don’t have to pay these things.

Thanks for your advice and help.

nyermen · 25 April 2018 at 9:32AM

Hi - someone more knowledgeable will be along with the formal guidance, but I'm aware they set limits for certain things.
The £40 activities (gym) may be okay if those are contractually committed (have to pay at least for a period - eg. Gym fees, swimming lessons etc), but flexible items like £20 for presents I suspect will not be allowed.

Read this for general guidance:
https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/how-income-debts-and-belongings-are-assessed-for-a-debt-relief-order/

This thread on IVA's (note: very old data - 2012!) has information on stepchange's limits. Sadly 6 years old, but may give you an idea of how strict they can be with things. I think also stepchange's website has a budget planner that may cover some of these limits.
https://forums.moneysavingexpert.com/showthread.php?t=4386945

Good luck, sorry you're in this situation.

sourcrates · 25 April 2018 at 10:01AM

Your intermediary will advise you what is acceptable and what is not.

If unsure, ask them.

I dont think they need bank statements, just last 3 payslips, though i could be wrong.

Twubble · 25 April 2018 at 2:58PM

I had to give in one bank statement. I had budgeted money for gifts, hobbies, etc. Best to do a SOA and post it on here, but from what you say, you shouldn't have any problems. If you've gone over, the budget tool does tell you on Stepchange.

AmelieAva8 · 25 April 2018 at 5:01PM

Monthly Income Details[/b]
Monthly income after tax................ 1300
Partners monthly income after tax....... 300
Benefits................................ 137
Other income............................ 0
Total monthly income.................... 1737

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 652
Management charge (leasehold property).. 0
Council tax............................. 92
Electricity............................. 40
Gas..................................... 40
Oil..................................... 0
Water rates............................. 70
Telephone (land line)................... 10
Mobile phone............................ 42
TV Licence.............................. 12
Satellite/Cable TV...................... 15
Internet Services....................... 19
Groceries etc. ......................... 400
Clothing................................ 50
Petrol/diesel........................... 100
Road tax................................ 25
Car Insurance........................... 0
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0

Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 5
Other insurance......................... 25
Presents (birthday, christmas etc)...... 20
Haircuts................................ 0
Entertainment........................... 40
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1697

Assets
Cash.................................... 400
House value (Gross)..................... 0
Shares and bonds........................ 0
Cars(s).................................. 895
Other assets............................ 0
Total Assets............................ 1295

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
Next (default).................2033......0.........0
MBNA (default).................3500......0.........0
Barclaycard (default)..........4300......0.........0
Very...........................400.......0.........0
Argos (defaulted)..............479.......0.........0
Dfs? Started !!!8216;15...............400.......0.........0
Santander over draft ..........1999......0.........0
Co op over draft ..............1489......0.........0
Total unsecured debts..........14600.....0.........- [/b
Monthly Budget Summary
Total monthly income.................... 1,737
Expenses (including HP & secured debts). 1,697
Available for debt repayments........... 40
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 40

Personal Balance Sheet Summary
Total assets (things you own)........... 1,295
Total HP & Secured debt................. -0
Total Unsecured debt.................... -14,600
Net Assets.............................. -13,305

AmelieAva8 · 25 April 2018 at 5:05PM

Tax credits was £120 per month but I owe them approx £4000 at a guess, maybe less so I!!!8217;ve asked to stop payments. Husband only gives me £300 per month atm as he earns £500 ish from wages and then he is going to get something like £300 per month from sept from his retake year student loan. He used a big chunk of his April payment already for a new laptop he needed and paid off some debt and water payment.

My wages vary though, my basic is roughly £1300, but this month I!!!8217;m getting £1700 which includes 2 over time and a bank holiday shift. It feels like we are so close but maybe not close enough to qualify but otherwise will take us 20 years to clear debt (he has debt too)

I never meant to get into this mess. It!!!8217;s so stressful

AmelieAva8 · 25 April 2018 at 5:56PM

Or do I hold off on doing anything for now and try and get more shifts and snow ball my debts? They have all frozen interest so it’s never increasing. I just don’t know what to do for the best.

fatbelly · 25 April 2018 at 11:07PM

There's nothing in your soa that would scare me from doing a DRO. Some observations/questions though:

Is your benefits amount child benefit for 2 kids? 34.40 per week is a little higher than that.

If you don't have kids your food spend is on the high side

No car insurance?

Only your income is relevant, and you would take a proportion of the expenditure. but if he earns 500 you give your intermediary that figure and let him do the calculation.

taxcredits overpayment is a debt and must go in, provided they have taken a decision to reclaim it.

the car at 895 and 400 cash are both ok as they have separate 1k asset limits.

AmelieAva8 · 26 April 2018 at 7:07PM

Okay thanks for your advice fatbelly.

Sorry I was suppose to put £25 in my car insurance and road tax is only £1.75 per month.

Yes I have two children.

So when I give them his total income, do I list his outgoings to? Eg petrol, phone, car ins ect.

I don’t want a joint DRO as it’s all my debt, he’s got his own debt. Thanks

Budgeting for DRO

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