Bonus and DRO

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RickAndLucy
RickAndLucy Posts: 2 Newbie
in IVA & DRO
I'm 6 months into a DRO, and I will be due a bonus from work in a month or so (only £250 ish). My question is whether it will ruin my DRO, I have already had a tax rebate, and so with this bonus it would put me over £1000 of assets in the year of the DRO.

Should I decline the bonus?

Comments

  • National_Debtline
    National_Debtline Posts: 7,998 Organisation Representative
    First Post First Anniversary Combo Breaker
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    Hi RickAndLucy and welcome to MSE,


    First of all, it is important to declare any change in circumstances to the Insolvency Service and they will assess the situation. If the bonus is performance related they may spread the money over the 12 month period as an 'income' and review your budget. I appreciate this carries a risk of taking you over the £50 per month threshold, but if your budget is restricted you may be able to use this extra money towards making it more sustainable (keeping your surplus under £50 per month).


    You should not refuse the bonus. If the Insolvency Service becomes aware of this then they may revoke the DRO as you have 'breached the spirit' of it. Even if they treat it as a lump sum, and that takes you over the £1000 threshold, they will look at the overall situation before revoking the DRO and they do judge each case on its own merit so it is not a certainty that it will be cancelled.


    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
  • irishgeal1
    irishgeal1 Posts: 16 Forumite
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    Hi RickAndLucy,

    I've just posted something similar in regard to my IVA and work related bonus. I think my situation may be slightly different as I accounted for a bonus when applying for IVA 6months ago.

    Will keep you posted.
    J
  • irishgeal1
    irishgeal1 Posts: 16 Forumite
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    I contacted my IVA practitioner about a possible bonus I may receive in December and they told me to contact them in January to arrange a repayment plan over the remaining term of the IVA (4.5 years). This is a minimal increase which works great for me.

    They also offered the option of paying additional income upfront.

    They were very relaxed and knowledgeable about the situation.
  • fatbelly
    fatbelly Posts: 20,494 Forumite
    Name Dropper First Anniversary First Post Cashback Cashier
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    IVAs and DROs have different rules in regard to lump sums acquired.

    With a DRO the rules once you are in a DRO are more relaxed than the entry criteria.
    The decision to revoke is discretionary and where the value of the property acquired is modest, the Official Receiver will not revoke for all cases where the applicant is open and honest and the value of the asset in question is less than £1000, provided that the total sum involved does not exceed 50% of the applicant’s total liabilities.
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