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    • cornish donkey
    • By cornish donkey 8th Oct 18, 8:11 PM
    • 52Posts
    • 9Thanks
    cornish donkey
    DROís and IVAís
    • #1
    • 8th Oct 18, 8:11 PM
    DROís and IVAís 8th Oct 18 at 8:11 PM
    Hi my husband has been signed off work and is currently receiving SSP but will be claiming ESA for the foreseeable, he has also made a claim for PIP. I do not work and claim Carers allowance for my daughter for whom we receive DLA and a disability element on child tax credits. My husband has around 15k on credit cards which we have been paying the minimum payments for as we cannot afford anymore but now we are not sure if we can pay at all! I have been looking into a DRO for him but am confused by the qualifying criteria. Is our benefit classed as spare income? How much should we have to live on? Is it £50 each spare income per adult per household? What will happen to my credit rating and car?

    Or is an IVA an option?

    Iím very worried 😟
Page 1
    • fatbelly
    • By fatbelly 8th Oct 18, 8:46 PM
    • 13,107 Posts
    • 10,165 Thanks
    fatbelly
    • #2
    • 8th Oct 18, 8:46 PM
    • #2
    • 8th Oct 18, 8:46 PM
    You are right that the credit cards are non-priority debts and if things are tight you do not pay them. You may want to post a statement of affairs so we can have a look at the detail

    Let's rule out an IVA as long as you are in rented accommodation as you would need a fair bit of surplus income to make a proposal and I can't see that if your household income is going to be ESA/CA/CB/CTC.

    The PIP is invisible in an insolvency solution so we can ignore that for now.

    As for a DRO the qualifying criteria are:

    ēMust not be a homeowner,

    ē Debts less than £20,000,

    ē Can have a car worth up to £1000,

    ē No other assets of more than £1000,

    ē Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

    ē Cannot have had a DRO in last 6 years.

    They are an individual solution so it is your husband's debts and income and assets that have to meet the above conditions. There's a £90 fee and they work well for most people who do one.
    • cornish donkey
    • By cornish donkey 8th Oct 18, 9:06 PM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    • #3
    • 8th Oct 18, 9:06 PM
    • #3
    • 8th Oct 18, 9:06 PM
    You are right that the credit cards are non-priority debts and if things are tight you do not pay them. You may want to post a statement of affairs so we can have a look at the detail

    Let's rule out an IVA as long as you are in rented accommodation as you would need a fair bit of surplus income to make a proposal and I can't see that if your household income is going to be ESA/CA/CB/CTC.

    The PIP is invisible in an insolvency solution so we can ignore that for now.

    As for a DRO the qualifying criteria are:

    ēMust not be a homeowner,

    ē Debts less than £20,000,

    ē Can have a car worth up to £1000,

    ē No other assets of more than £1000,

    ē Must have £50 or less left at month end, after all essential payments have been made (not inc debt repayments),

    ē Cannot have had a DRO in last 6 years.

    They are an individual solution so it is your husband's debts and income and assets that have to meet the above conditions. There's a £90 fee and they work well for most people who do one.
    Originally posted by fatbelly

    Thank you for your reply. I will post my statement of affairs in a bit.
    We have no assets, owe below £20,000, we do not own a property and the car is mine worth around £3,000.

    What benefits are taken into account or disregarded as income?
    And what can we do to solve this if we have more than £50 spare a month not including debt repayments but cannot afford to make repayments?
    • fatbelly
    • By fatbelly 8th Oct 18, 9:59 PM
    • 13,107 Posts
    • 10,165 Thanks
    fatbelly
    • #4
    • 8th Oct 18, 9:59 PM
    • #4
    • 8th Oct 18, 9:59 PM
    I doubt you (or rather your husband) would show >£50 surplus.

    PIP/DLA are excluded in that you can put them on the income side and the care and mobility needs side.

    If there are any debts in your name you would probably do a debt management plan.
    • cornish donkey
    • By cornish donkey 8th Oct 18, 10:14 PM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    • #5
    • 8th Oct 18, 10:14 PM
    • #5
    • 8th Oct 18, 10:14 PM
    I doubt you (or rather your husband) would show >£50 surplus.

    PIP/DLA are excluded in that you can put them on the income side and the care and mobility needs side.

    If there are any debts in your name you would probably do a debt management plan.
    Originally posted by fatbelly

    There are no debts in my name only the household bills are in my name.

    What do you mean by ďPIP/DLA are excluded in that you can put them on the income side and the care and mobility needs sideĒ?
    • fatbelly
    • By fatbelly 8th Oct 18, 10:19 PM
    • 13,107 Posts
    • 10,165 Thanks
    fatbelly
    • #6
    • 8th Oct 18, 10:19 PM
    • #6
    • 8th Oct 18, 10:19 PM
    You asked

    What benefits are disregarded as income?

    The answer is

    PIP and DLA

    There are some more obscure ones also disregarded.

    But put everything on your soa so we can see them.
    • cornish donkey
    • By cornish donkey 8th Oct 18, 11:12 PM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    • #7
    • 8th Oct 18, 11:12 PM
    • #7
    • 8th Oct 18, 11:12 PM
    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 0
    Partners monthly income after tax....... 0
    Benefits................................ 1563
    Other income............................ 0
    Total monthly income.................... 1563


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 18
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 0
    Electricity............................. 70
    Gas..................................... 70
    Oil..................................... 0
    Water rates............................. 27
    Telephone (land line)................... 30
    Mobile phone............................ 95
    TV Licence.............................. 13
    Satellite/Cable TV...................... 50
    Internet Services....................... 20
    Groceries etc. ......................... 560
    Clothing................................ 0
    Petrol/diesel........................... 40
    Road tax................................ 20
    Car Insurance........................... 96
    Car maintenance (including MOT)......... 0
    Car parking............................. 10
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 30
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 9
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 0
    Haircuts................................ 0
    Entertainment........................... 8
    Holiday................................. 0
    Emergency fund.......................... 0
    Total monthly expenses.................. 1166



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 3000
    Other assets............................ 0
    Total Assets............................ 3000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 300......(18).......0
    Total secured & HP debts...... 300.......-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    Credit card....................6500......60........0
    Credit card....................5000......48........0
    Credit card....................2000......30........0
    Catalogue .....................1000......60........0
    Credit card....................5000......50........0
    Total unsecured debts..........19500.....248.......-



    Monthly Budget Summary

    Total monthly income.................... 1,563
    Expenses (including HP & secured debts). 1,166
    Available for debt repayments........... 397
    Monthly UNsecured debt repayments....... 248
    Amount left after debt repayments....... 149


    Personal Balance Sheet Summary
    Total assets (things you own)........... 3,000
    Total HP & Secured debt................. -300
    Total Unsecured debt.................... -19,500
    Net Assets.............................. -16,800


    Created using the SOA calculator at www.stoozing.com.
    Reproduced on Moneysavingexpert with permission, using other browser.
    • cornish donkey
    • By cornish donkey 8th Oct 18, 11:22 PM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    • #8
    • 8th Oct 18, 11:22 PM
    • #8
    • 8th Oct 18, 11:22 PM
    The above is the household finances for both of us but the car is mine so I’m not sure if that makes a difference? It looks like we will be able to make minimum payments but with the way things are neither of us are going to be working anytime soon and the finances do not include clothing and school outings for the kids. Is there anything we can do? If we carry on paying minimum payments we’re going to be struggling like this until old age ��
    • cornish donkey
    • By cornish donkey 8th Oct 18, 11:59 PM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    • #9
    • 8th Oct 18, 11:59 PM
    • #9
    • 8th Oct 18, 11:59 PM
    I’ve been on the stepchange website and they do not recommend an IVA but bankruptcy is an option what are your thoughts?
    • fatbelly
    • By fatbelly 9th Oct 18, 6:41 AM
    • 13,107 Posts
    • 10,165 Thanks
    fatbelly
    I think he'll be OK for a DRO but he needs to act before he gets to 20k.

    I think you've put daughter's DLA in there, which is not income in a dro. His share of the income is small, so likewise his share of the surplus.

    I doubt you have as much surplus as the soa shows, though it looks like you will be able to survive on the reduced income.

    There is nothing for rent, council tax, school expenses, clothing (suggest 86), car maintenance (suggest 25), haircuts (suggest 20)

    If you're Cornish and in Cornwall, the CAB have dro intermediaries in every major town.

    Is the HP Brighthouse or something?
    • cornish donkey
    • By cornish donkey 9th Oct 18, 7:43 AM
    • 52 Posts
    • 9 Thanks
    cornish donkey
    I think he'll be OK for a DRO but he needs to act before he gets to 20k.

    I think you've put daughter's DLA in there, which is not income in a dro. His share of the income is small, so likewise his share of the surplus.

    I doubt you have as much surplus as the soa shows, though it looks like you will be able to survive on the reduced income.

    There is nothing for rent, council tax, school expenses, clothing (suggest 86), car maintenance (suggest 25), haircuts (suggest 20)

    If you're Cornish and in Cornwall, the CAB have dro intermediaries in every major town.

    Is the HP Brighthouse or something?
    Originally posted by fatbelly

    Thanks for the reply.

    The benefit income is made up from ESA, child benefit, Carers allowance and child tax credit for 2 children with a disabled element for 1 child.

    And Iím not from Cornwall lol I just couldnít think of a username
    • fatbelly
    • By fatbelly 12th Oct 18, 9:00 PM
    • 13,107 Posts
    • 10,165 Thanks
    fatbelly
    Iíve been on the stepchange website and they do not recommend an IVA but bankruptcy is an option what are your thoughts?
    Originally posted by cornish donkey
    I can't see bankruptcy having any advantages if he qualifies for a DRO.

    Where bankruptcy can be an advantage is if you know there are more debts out there but don't know the details. With a DRO it's only the debts you list that are written off. With bankruptcy all your debts that pre-date the bankruptcy are covered, whether you list them or not.

    But he seems to know the detail, DROs are cheaper, you cannot be given an IPA. I would talk to a sensible intermediary - see if your CAB has one - and see if you can push it forward.
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