About to start a DRO.. mobile phone

Mobile Phone Contracts

If the debtor is up to date with their mobile phone contract and there is no outstanding liability at the date of determination, then there would be no indebtedness to schedule in the DRO and provided the Intermediary assessed the contract payments as an allowable expense, the contract can continue.

The AI should check the type of agreement, as they can be finance or HP agreements. The value of the handset/device should be checked to ensure it will not breach the asset parameter should it become the debtor’s property during the moratorium period.

Should the debtor subsequently default on the contract the creditor will have the usual rights to recover the debt.

The inclusion of a mobile phone liability in a DRO will normally result in the contract being terminated and the debtor being issued with termination charges for the remainder of their contract these will be a qualifying debt in the DRO and discharged at the end of the moratorium period.