Ask a StepChange (formerly CCCS) counsellor a bankruptcy question

walker1627 · 11 December 2014 at 7:20PM

£9500 in DMP and £1400 overdraft.

alastairq · 11 December 2014 at 11:24PM

http://debtcamel.co.uk/debt-options/dro/

Worth a read?

StepChange_James · 12 December 2014 at 1:26PM

walker1627 wrote: »

I took out DMP with payplan 4 years ago. Since then my circumstances have changed drastically. My husband and I separated and sold our house (no real equity) and I now rent a home with my 2 children.
I had been paying £100 a month into DMP but been struggling for months. I did a financial statement with PP yesterday which shows I do not have a penny left after expenses. I have agreed to cancel AA membership in order to make a £20 payment to DMP. The advisor suggested a DRO to me and having done some research, I think I qualify. I have a Santander bank account which is £1400 overdrawn and not inc in DMP. Would I be able to include it in DRO?
Also, how do they decide the value of car? Mine is borderline for being under £1000 although it's 11 years old and basically a skip on wheels!
What would happen down the line if my circs changed eg I got re-married or inherited money?
Also, I'm not yet divorced, hubby and I applying in jan (non contested) what happens about the court fees?
I'm wary of doing a DRO but at my current payment, I won't be debt free until 2051 :eek: so I'm thinking this might save me a lot of future worry!
Thanks in advance for your help.

Hi Walker,

Without knowing your full details it's hard to say for certain, but a DRO can be a good option if you meet the criteria and aren't likely to be able to repay your debts in a realistic timescale.

The Insolvency Service use the Parker's website to value cars: http://www.parkers.co.uk/ (unfortunately they only provide free valuations for relatively new cars - registered after 2005).

In terms of changes in your circumstances, the timing of these changes would be the most important factor. When you start a DRO there's a 12 month "moratorium" period. Any changes to your circumstances that meant you didn't qualify anymore would mean that you're DRO would be stopped and you'd have to deal with the debts.

If you get past that 12 month period then you'll be discharged and you won't have to deal with the debts any more and any improvements in your finances are yours to keep.

I'd suggest talking to your advisor at Payplan about the court fees for the divorce. They'll more than likely ask you a few questions to clarify the situation and then be able to give you a full answer.

Kind regards

James

walker1627 · 12 December 2014 at 9:21PM

Thanks for the replies. I've spoken to step change today and gone through my income and expenditure. They feel that a DRO is my best option and are sending out the paperwork for me.

Newman2 · 11 January 2015 at 6:56PM

Due to a job loss I will most probably have to go bankrupt a second time. 8 years since last one and only between 12000 and 13000 but without a job impossible to pay off. What can be expected of a second bankruptcy? Or should I consider a dro? I was sorting out the debt but job loss has scuppered all chance of that.

Newman2 · 12 January 2015 at 5:56PM

Any StepChange reps about could answer my query please?

alastairq · 12 January 2015 at 6:58PM

Providing you have below the maximum surplus income, then with that level of debt, a DRO would probably be appropriate.

Essentially, your question has been answered in the main forum.

You seemed confused with the concept of a 'surplus' of income?

What this means is, a surplus after all reasonable living expenses are covered.....obviously, any current debt repayments would have ceased, so would not form part of your SOA.

Newman2 · 12 January 2015 at 7:57PM

I realise I had an answer in the main forums and am thankful for that but was hoping a Stepchange advisor would also leave a message (nothing against the other posters as their advice was great as well).

In terms of the surplus, what I worry is that if I did a DRO then got a job on a much lower wage than I am on now but left a surplus of, say, £100, that would not be enough to pay towards the debts but the DRO would cease. In that case, bankruptcy would be better surely as the debts are wiped off and an IPA is worked out based on a percentage of surplus which would be manageable (or at least was the last time I did this).

alastairq · 12 January 2015 at 11:36PM

Your decision as to which way to go is naturally based on a number of ''if's''...

Former_StepChange_Rachel · 13 January 2015 at 4:31PM

Newman2 wrote: »

Due to a job loss I will most probably have to go bankrupt a second time. 8 years since last one and only between 12000 and 13000 but without a job impossible to pay off. What can be expected of a second bankruptcy? Or should I consider a dro? I was sorting out the debt but job loss has scuppered all chance of that.

Hi there, thanks for posting

If you're considering bankruptcy or debt relief order, we can look into your situation for you and advise on what your best options might be moving forward. In order to do this, we would need to take a look at your budget and make sure that all your living expenses are properly accounted for. You can read more about bankruptcy, DROs and various other debt solutions on our website.

Our online advice tool Debt Remedy will help you put together an action plan in just 20 minutes.

Hope this helps

Best regards

Rachel

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