Is a DRO right for me?

DebtFreeTime wrote: »

Sorry for the long post.

For the first time in my life I'm trying to become debt free so PLEASE do not judge. I've thought about a DBO since January but never looked in to it but I've now read about the DRO quite intensively the last week and a half but I still need some advice/guidance/nudge before I call the National Debt line.

No judgement, most on this board have at some point been in this situation to one degree or another. You've taken a positive step.

Background: I have had a hard year with both parents and grand parents passing within 18 months, being evicted again (3rd time in my life), being homeless the list goes on and I now finally have a home (rented).

I get CTC and WTC as I was a managing director of a limited company. After some issues with the landlord he's now taken his property back. When trying to dissolve the company, companies house have wrote to my business address for me to confirm however the landlord won't give me access to the property or any letters sent there. (Constant problem and are now going court when funds are raised with said landlord). So moving on, I've called Tax credits for my WTC to be stopped as I'm no longer working and I have put in my claim for income support (one of my children is under 5).

I'm currently studying a post graduate course (started September 2016 finishing September 2017) but have been looking for work. Once I moved in to my new home I gathered ALLLLLL my debt letters telling my self I will eventually sort them. Because I joined the electoral register...debt collectors have now found me. :eek::eek:And it's like every day another shiny red letter comes through. I've now had Bristow and Sutors bailiffs at my door.

You seem quite knowledgable already, I apoligise if this is something you already know; do not let them in, try not to engage, and move forward with a debt solution that is right for you.

My life time of Debts come up to just under £16,000.

This does not include rent arrears on my current property due to housing benefit being delayed. (£1000) and Old rent arrears for three properties from 2009-2016 totalling £10,000. 2 of the landlords (£8000) have told me they are not going to chase me for the money as it will cost them more in the long run.

I have tax credits over payment of £5500 (included in figure above)

My rent is £90 a week which is covered by housing benefit. My council tax is £15 a week which is covered by housing benefit. (I don't see either of these it's credited directly to my LHA.)

My course is £7,500. I get the post graduate degree loan which is £10,000 over the whole year however the first payment (£3300) I had to give to my sister as I borrowed some money for a car and to survive whilst homeless. (I owe her £1700 more but she's not chasing me for it as she knows my financial position.)

The second payment due in January - £3300 will all be getting paid to my course and my final payment in April £3400 will also be going towards my course leaving me with £800 left to pay by September 2017.

I have a car registered to me. I brought the car for £3500 in April 2016 via my sister. 2 weeks later I was involved in a severe crash (50/60mph each) which was deemed as my fault (my break cord had split and some how I was supposed to have knew this!?) my insurance was also voided because of this. So I wasn't paid out. My car is still in the garage from then. It is deemed a right off as to fix it will cost £2,000 but I've just left it in the garage (occurring a £3 a day fee - around £600 now). My plan with the car is to just sell it to the garage (they've offered £800) to cover the fees and pocket the extra £150 which they said they would pay me in the new year.

I don't have any credit cards any over drafts, nor do I have anything on hire purchase. Besides "my" car, I don't have any other assets. I have a 48" Tv in my living room (which cost £120 paid for in instalments but now clear). Nothing else in my home cost more than £100.

"My" car is declared sorn so I'm not paying insurance on it. I buy a train ticket and bus ticket weekly which gets me to and from uni.

Income - monthly (4 weekly) are:
£100 - child maintenance.
£620 - WTC & CTC weekly (which as stated above is due to change)
£134 - CB weekly.
Total incoming: £856

My outgoings monthly (4 weekly) are:
£120 - train pass (paid weekly @£30)
£68 - bus pass (paid weekly @ £17)
£200 - gas (paid weekly @ £50)
£80 - electric (paid weekly @ £20)
£30 - TV license Paid weekly@£7.50)
£160 - food shopping
£40 - rent arrears for current flat
(My water is £7 a week but I'm yet to pay this)
£17.50 - bank fee
£20 - broadband and phone line
£30 - phone bill (contract)
£37.80 - council tax (recovery)
£40 - school dinners.

Total: £837.30p

Leaving: £18.70 which is less than £5 a week hence y I'm in so much debt.

I've tried to write to them using templates off this site for them to cease the debts but they've told me no.

None of my accounts have arrears or over drafts. Bank accounts:
Nationwide account (flex) - £9.84p
Nationwide (flex account) - 0.04p
Think money account - £50.00p
Nationwide savings - £2.01p
Nationwide help to buy - £4.32p
Nationwide online savings - 0.5p

My questions are:

1) I'm going to apply for a DRO as I think that's wisest for me right now as my debts are not over £20,000. Is this smart to do or should I apply for bankruptcy incase the landlords decide to claim within the next 6 years?

The debt with the landlords exists and is counted, although not a debt on your credit report; you can't choose which debts go into a DRO and rightly point out that if claimed/discovered it would invalidate the DRO by pushing over the limit.

2) my car doesn't show up on the parkers site but shows up on others site as the value still being £3500. Does it matter that it's in a write off condition and worth less than that or will the DRO not go through as its classed as an asset? Should I wait for the car sale to apply for the DRO!

It's redundant because a DRO is not possible. Also, have a google of transactions under value, although the garage might be offering a fair price you would (in my opinion) be better served leaving the asset in place and declaring bankruptcy, allow the Official receiver to deal with the car and the garage fees.

3) I want to apply for jobs and work especially now I'm doing my masters, I know the threshold is £50 a month but is this £50 for me AND my children (so £150 in total) or just £50 overall.

It is £50 overall with expenses like groceries, school meals, travel etc etc all taken into account for the family makeup i.e your dependents.

3a) me working would mean I would have to pay nursery fees and my housing benefit would stop meaning I would have to pay rent (maybe not all but at least some) would this affect the DRO?

You would recalculate the budget with your intermediary.

4) can I still take my ex landlord to court with a DRO? I'm taking him to small claims court to recover £6,000 in losses from him on behalf of my (old) limited company. So if I do win would this effect my DRO although the cheque would have to be made out to my company to pay those bills off first? I.e electric/wages etc.

The debts for electric/wages etc would have been taken care of by the insolvency. Receipt of anything above £1000 (in general) would cause your DRO to be revoked.

5) will the debt pushed towards me as a managing director of the company be able to be included in the DRO? As I was a sole director with 100% sole shares. However the business closed in debt not credit.

Any debt you're liable for would need to declared in a DRO.

6) will this effect my children in any way? (They are both under 6)

You won't be the first and certainly no the last person to go through insolvency. If anything you're providing a more stable environment for your children based on financial certainty.

7) I have been with nationwide since I was 16 I don't want to close my accounts with them. Is it likely they will close or freeze my accounts when they hear about my DRO although I have no over drafts or arrears with them?

Discuss this with Nationwide, my own experience tells me that the savings accounts will be closed (you can reopen them again) and your current account(s) will be downgraded to Flexbasic or closed. If closed you would apply for a flexbasic instead.


8) will child maintenance be effected by this DRO?

No.

9) is it best for me to wait till I get a job - I know I'll be on a decent wage as I'm doing a masters degree then Just pay of my debts in instalments? I worked out if I pay £250 a month I'll be debt free in 8 years 🙈

Bankruptcy (in my opinion) is a sensible option for you (6 years vs 8, a catch all solution with no worry of catch ups or missed creditors). If you could post up a new statement of affairs in the bankruptcy board and give the board your circumstance, some great people will help find a remedy that suits you. Once you have some answers give stepchange or national debtline a call and verify/go over things and take their advice before proceeding with a solution. Use this tool to post a SOA: http://www.stoozing.com/calculator/soa.php

10) I want to buy my council flat, not now in around 4 years as it will be £20,000 with all the discounts with the DRO on my file I doubt I'll be accepted for a mortgage so I will be (albeit I get a good job) saving (hopefully) after my 12th month £500 a month so that I can have the £20,000 cash to buy out right. Is it likely I'll be able to buy a flat out right with a DRO still on my file?

One step at a time, although it is fantastic to have an aim, resolve the looming bailiff and debts first. That said Natiowide among others, will lend at 36 months post discharge dependent on various circumstance.

11) I'm not interested in getting anything on finance or HP in the next few years but I would like to be self employed again in around 3 so is the DRO wise? Could this effect that?

Insolvency might hamper attempts at financing when self employed for a few years but if you're not dependent on finance it's not a barrier.

12) do I need to include the rent arrears which lead to eviction for the three properties which have not contacted me about it (2 saying they never will) because I know it's there they just haven't chased me for it...ever.

Yes, and this is why a DRO is not suitable. The bankruptcy board on MSE and stepchange/national debtline will get you moving forward.

13) around £6000 of the debt listed defaulted over 6 years old. Is this to be included in the DRO as I last contacted/paid them in less than 6 years?

You're referring to the statute of limitations. If it is statute barred then no. You would need to check if you been in contact/made any payments in the last 6 years.

14) my current flat is unsecured via council can the DRO lead to my eviction? And the rent arrears I've included on here for this property will they be included in the DRO although I'm actually still living here? Do I stop paying my £10 a week towards it? Will the council just wipe my debt clear? Or am I still liable to pay this?

The repayment is an essential outgoing and thus not a 'preferential payment' (google preffered creditior insolvency). It is wise to keep paying the £10 to keep a roof over your head. I assume the property is let by the council/housing association? In that case you would likely retain the tenancy, seek advice from Stepchange/National debtline on this point.

15) I was still getting paid nursery fees although I told tax credits several times my daughter wasn't in nursery at that time. They over paid me £6000. So far they've taken back £500 and it says they will take the rest of the £5500 in future payments. I don't mind paying it back as it wasn't rightfully mine (although I did tell them and have proof of this) is this included in the DRO or not? They take around £10 a week out of my payment before it gets to me.

It would be included in an insolvency as a debt and would be written off.

16) I'm mid late twenties so by time the 6 years is up I'll be early thirties. Am I too young/to old to do this now? Will this ruin my financial future?

I'm 30 and now discharged (this year). I plan to mortgage with my family after 3 years. I'll be 35 worst case and debt free (mortgage aside). My driving force behind sorting my problems out (I buried my head in the sand since the age of 17) was the thought of returning to normality, no more stress of debts lurking behind absolutely everything I did. Sooner is better.

Obviously typing this all out and looking at the severity of my debts I realise how stupid I've been over the last 10 years by burying my head in the sand. :(But now I want to sort this out so I can start a fresh and get my life on track for my children so please do not judge me. If you got so far thank you. And Thank you in advance for any advice.

Debt free wana be ☹️☹️☹️