A Debt Relief Order (DRO) is often the best debt solution if you have under £30,000 of debt, you are renting and you have hardly any spare money to repay your debts. You don’t have to make any payments in a DRO and, after a year, your debts are wiped out.
The DRO limits described in this article are the new limits that are being introduced from 29 June 2021.
You can’t apply for a DRO yourself, the application has to go through a debt adviser who is an Approved DRO Intermediary. In this article, I just call them your DRO Adviser as it’s shorter!
Most DROs are set up by Citizens Advice, but National Debtline, StepChange and Christians Against Poverty also handle a lot. It doesn’t matter who you go through, the DRO you end up with will be the same.
Because you aren’t applying directly, the process may seem a bit confusing.
The best answer to every question is ask your DRO Adviser – each firm has their own internal forms and methods. They really want you to get through this process as quickly and easily as possible and the more you understand what is happening, the simpler that is going to be.
But if you are feeling anxious, or you can’t get to talk to your DRO Adviser for a few days, here are the common questions I hear about DRO applications.
Contents
Questions about eligibility and suitability
I have covered the DRO criteria here – they are fixed numbers, not rough guidelines, and you will have to meet them all. Your DRO Adviser checks this and won’t submit your application if you don’t.
I’m self-employed, I make little money but it’s erratic
You can have a DRO if you are self-employed. Business Debtline are good people to talk to about your situation as a variable income can make it harder to judge.
My bank account often has a lot more than £75 in it so will the Insolvency Service reject a DRO?
This isn’t a problem. Your DRO adviser will do a proper check on your income and expenditure and if they say you meet the “under £75 spare income a month” test, then you are going to be fine.
I have applied for PIP but don’t know if I will get it
Tell your DRO adviser. If your only income is from benefits, this won’t matter, you will definitely qualify for a DRO. Even if you have other income it may be OK – although your income may be going up, your advisor can include extra disability expenses.
If you get a backdated amount when your PIP application is accepted, this won’t be a problem for your DRO. Backdated “premium” amounts that are added to other benefits when you get PIP can be a problem – talk to your DRO adviser about these.
Does it matter if I went bankrupt 4 years ago?
No that won’t matter.
The DRO Unit of the Insolvency Service will only refuse your application because of previous insolvencies if you:
- are currently an undischarged bankrupt; or
- you are currently in an IVA; or
- you have had a DRO in the last six years.
I’m staying with friends but when I get a place to rent, I will have no money
Applying for a DRO at the moment probably isn’t a good idea! I suggest you save up the money for a deposit and move out. Then you will know what your expenses are and what your surplus income is.
Also it can be simpler to find somewhere to rent without a DRO (or bankruptcy or an IVA) on your credit record.
You may well be right that you will be broke when you have moved, but getting yourself settled is your top priority. Your debts – and any DRO – can wait.
I’m going to retire in about 6 months, what about my lump sum from my pension?
If you get a large lump sum from your pension whilst you are in the middle of your DRO year, your DRO will probably be cancelled.
Unless you can postpone taking your pension until your DRO is completed, a DRO probably isn’t a good option for you. Talk to your DRO Adviser about this and about what your other alternatives are.
My maternity leave is ending in a few months – will this be a problem?
Your income will increase, but you may also get large childcare expenses, cost of travelling to work etc and your benefits may reduce, so you may still meet the DRO criteria. You need to talk this through with your DRO Adviser.
If returning to work will be a problem for your DRO, then you may have other alternatives eg part time work for a few months until your DRO ends
Questions about income, assets and expenses
I don’t have any bank statements – does this matter?
Your DRO Adviser will want some proof of your income – if they ask for bank statements and you don’t have any, it’s usually easy to get one. Or they may be happy to accept wage slips and any benefits letters. The Insolvency Service doesn’t need to see your bank statements.
Are student loans treated as income when applying for a DRO?
Student maintenance loans and grants count as income for a DRO. The loan you get for tuition fees is ignored.
If you are going to uni as a mature student, a DRO may well be a sensible option for you.
Why do I have to say what my partner earns?
A DRO won’t be refused because your partner earns a lot – they aren’t going to be told to pay your debts. You are only being asked about their income so that it can be checked that your rent and bills are being fairly divided between you. If you earn the same, a 50/50 split would be normal.
We are both going to need a DRO – how do we divide up the expenses?
Expenses are usually divided in the same ratio as your income. So if you both have about the same income, you spilt the rent, council tax, and all joint household bills 50:50. If your income is twice what your partner’s is, you would be expected to pay 2/3 of the bills and your partner 1/3.
But you don’t have to sort these numbers out, get the same debt adviser to do both DROs and they will do all this.
My parents have been giving me money to help with my debts
Those are gifts and they could stop at any time. They don’t need to be reported on your DRO application as income because they aren’t income.
Is my car worth what I can sell it for?
You can get a valuation using Parker’s Guide, This gives a range of values for your car – talk to your DRO adviser who may agree that the bottom end of the range is likely to be acceptable.
I have a car registered in my name for insurance, but it’s owned by my mother – what will happen?
Tell your DRO Adviser but this should be fine. What matters is who owns the car, not whose name is on the insurance or the V5 registration. You will probably need to provide some proof about who bought the car.
I’m unemployed and I pay my mum £30 a week for rent and board – is this allowed?
That isn’t going to be a problem – it would cost you far more to rent a room privately somewhere else!
I’ve made an affordabilty complaint – should I delay until this is sorted?
Possibly but unless the refund will be large, it may be best to get on with the DRO now. Read “If I get a refund, what will happen to a DRO?” which looks at this in detail.
Questions about debts
Why do I have to get my credit reports?
You are being asked for a credit report so that your DRO Adviser can be sure all your debts are being listed. This is for your own protection – any debts which are not listed on your DRO application are not included in it and so you will still have to pay them.
What details are needed about the debts?
Who the current creditor is, the amount and the reference number. If there are several reference numbers – the original credit card number, a debt collector account number and another number on your Experian record say – list them all to be on the safe side!
Do I have to include my broadband/mobile/car insurance contract which still has over a year to run?
These are “service contracts” – you aren’t repaying a loan, just paying for a service, eg supply of broadband, throughout the year. You don’t generally have to include service contracts unless you are behind with the payments – in that case they do have to be included.
But you need to check with the adviser setting up your DRO that the payments will be allowable as an expenditure.
With a mobile contract, it may be set up as part loan and part service contract. In this case is it usually possible to include the contract in your DRO but keep the handset and then get a PAYG sim-only contract. Talk to your debt adviser about this.
I stopped paying most debts ages ago but still pay two catalogues – is this a problem?
Technically this is called “preference” – paying some creditors and not others. That may sound alarming, but it’s pretty common. Although the DRO Unit can refuse a DRO application if this has happened, they assess how serious the preference was. Most people don’t have a problem:
- if the preference was a while ago and before you took advice about a DRO, it matters a lot less – so from this point you must treat all your debts equally. For most people this means not paying anything to any of them. BUT don’t stop paying any priority debts without talking to your DRO Advisor first!
- if you had been paying a family member or a friend and not paying commercial debts, that is seen as more serious.
Talk to your DRO Adviser – they may not be concerned or they may suggest putting off a DRO application for a few months so the preference is further in the past. But if you have problems with bailiffs or other urgent reasons it may still be good to apply now.
I used my credit card last month – is this a problem?
This is another common situation. It does depend on why you used credit – paying for an essential car repair is much less of an issue than taking the family to Disneyland!
A DRO application won’t be refused because of this, but it is possible that some extra restrictions may be imposed if the DRO Unit thinks you have behaved recklessly.
Talk to your DRO Adviser. Some DRO Advisers don’t like putting in an application unless you haven’t used any credit for several months, but if the amount was small, or for an urgent need, you may want to carry on with it. Once you have decided to apply for a DRO you should not use any more credit.
I have a car on HP – is this a problem?
You have to talk to your DRO adviser about this as it can get complicated. Briefly:
- any arrears on the HP have to be listed as a debt in your DRO;
- if you don’t have arrears, the HP doesn’t have to be listed and then it doesn’t count towards the £30,000 debt limit;
- the car finance company may sometimes choose to end the agreement and repossess the car even if it is not listed. (This also happens in bankruptcy and IVAs.)
- your DRO has to decide if your future payments to the HP will be an “allowable expense”.
Of course if you don’t want to keep the car, you can hand back the keys and then list the debt in your DRO so it is wiped out.
I am repaying a Universal Credit advance – can this be included?
Yes, it can. UC Advances are debts that should be included in a DRO. When the DRO is approved, any deductions from your current benefits for these should stop.
This also applies to benefit and tax credit overpayments. But it does not apply to Social Fund loans – these cannot be included in a DRO.
I’m confused about rent arrears
Rent arrears are a debt that has to be included in your DRO. But if you are still living there, you are allowed to carry on repaying the arrears and if you don’t, the landlord or Housing Association/Council may try to evict you.
Talk to your DRO Adviser about this – it’s important you get an affordable arrangement in place to repay your rent arrears in place.
This is one case where going to your local CAB for help with a DRO is good as they may know what policies local Housing Associations have.
Questions about how long the application takes
When my local CAB has checked my DRO do I then apply to the Insolvency Service?
No. Only approved intermediaries can submit an application for a DRO, you can’t do this.
Your DRO Adviser gets the information to go on the application from you and your credit records. You then have to sign to authorise them to send in your application.
I’m about to pay the £90, has my application already gone in?
No. You will have been sent the letter with a barcode on it to pay the fee. The fee goes to the Insolvency Service. You then need to tell your DRO Adviser you have paid this and at that point they submit your application.
How long does it take to approve a DRO?
It’s quick! Your DRO Adviser will usually get an email a couple of working days after submitting the application to say it has been approved.
The letter to you confirming this, called the Debtor’s Notice, is posted the same day your DRO Adviser is told, so you usually get it the day after. It’s a good idea to keep this letter safe, even when your DRO has finished, because it proves what debts are included in your DRO.
The Insolvency Register is also updated, showing your DRO.
How many DROs are rejected?
Only a tiny number of DRO applications are rejected – less than one in three hundred applications.
If your adviser has agreed to put your application forward, it is because they have already made all the checks and they don’t expect any problems.
How long do creditors have to object?
Creditors don’t have to agree to your DRO, there is no set time at the start for them to approve or object.
A creditor can only object if they think you didn’t meet one of the DRO criteria. This doesn’t happen very often, and then the DRO Unit have to consider if the objection is accurate – most of them aren’t. It is VERY rare for there to be a problem with this – you don’t need to worry about it.
I am just about to pay the £90 and I have been told one of my debts has been sold
Tell your DRO Adviser – they may want to change the application. This isn’t a problem, it’s just a bit of a hassle.
I’ve paid my £90 DRO fee two days ago and I have had a letter from a bailiff about council tax
From this point it should be very quick, so you could simply ignore this letter, but tell your DRO Adviser and make sure your application has been submitted.
If a bailiff calls, do not open the door under any circumstances, not even to explain about your DRO. See Do I have to let a bailiff in?
Other questions
Do I need a new bank account?
If you have an overdraft, it will be one of the debts in your DRO – you can’t leave it out. You will need to get a new bank account, but there is now a good range of basic bank accounts to choose from, see Getting a basic bank account.
If you don’t have an overdraft, you will usually be able to keep your current account. Your bank isn’t told you have started a DRO. Anecdotally NatWest and Halifax sometimes make you downgrade to a basic bank account from a standard current account.
Who is told I have a DRO?
Your creditors are told, your name is included in the Insolvency Register (which lists people with bankruptcy, IVAs and DROs) and a marker will be added to your credit record.
There is a procedure to not include your address on the Insolvency Register if you have had domestic violence or similar issues – talk to your DRO Adviser if you are worried about this.
Your partner isn’t told – but it is always a good idea to tell them yourself!
Your employer isn’t told unless you owe the employer money or unless you have an attachment of earning in place (which will stop) your employer isn’t contacted.
Your landlord is only told if you have rent arrears.
Will a DRO affect my partner’s credit record?
Only if you have a joint bank account or loan with them.
Do I have to send in monthly statements?
No! No one checks up on your income and expenditure during the DRO year. Or at the end of the year.
If this sounds unlikely, think about how low the fees are… Your £90 isn’t going to pay for anyone to be looking at your bank statements each month!
Can I move abroad?
Yes – tell the DRO Unit your new address and you will still have to inform them of changes to your income and expenses.
No such thing as a foolish question
I hope I have covered many people’s questions here. But tell your DRO Adviser about any concerns or questions that you have. Not just about your current situation and the application process, but about what may happen in the next year. It’s better to have this discussion before an application goes in!
Can I leave a debt out of a DRO?
Do debt collectors still phone after a DRO?
DROs and your credit rating
Jay says
Yes I will still be contributing to the running of the car and I use it to do the school run, get to work and collect and drop my child off when they stay…so would they still include this in the calculations?
I have around 19000 of debt and no rent arrears and no debts that aren’t included in the DRO.
I am currently not paying anything towards debt as I have wrote to my creditors asking for a payment suspension and have a 30 day payment holiday in place.
I was wondering with a cash sale of the car, would they expect me to put that towards the debt? Ideally I need the money just for living expenses. Thanks
Sara (Debt Camel) says
can you say what living expenses you need this for? (I’m not disputing it, just looking for what to suggest).
Jay says
It would be for rent, child maintaince, bills etc day to day living. If I sold my car before I applied for the DRO would this make a difference as I haven’t applied for it yet.
I wasn’t sure if they would ask where the money from the sale of the car has gone…in my eyes you could have already spent it on rent etc.
Sara (Debt Camel) says
The debt adviser setting up your DRO will probably look at your last few months banks statements. If the money has gone on essentials, that is unlikely to be queried. Amounts being given away to family or a holiday would not be essential.
You can have money in the bank when you apply for a DRO. You are allowed up to £1000 in assets. You don’t have to include everyday household items in that – even a new laptop probably has a low second hand value. So you could say aim to have more than £500 in the bank – that will make the next years easier to get through.
I suggest you talk to a debt adviser now about this – phone National Debtline on 0808 808 4000. I don’t know your full situation and this isn’t something you want to get wrong.
Sam says
Hi I’ve just been approved for my dro my debts total to over 19 and a half thousand I have my 02 phone on there which I thought in total was the correct amount today I received a letter from 02 stating I owe them the final bill although I was totally unaware about this I told them I have a dro but they are saying that only covers the handset not the line rental what do I do, i think it may be 100 150 over the original debt on my dro can someone please help it’s got me very worried as I don’t want my dro revoked because of them adding on more figures then the original amount
Sara (Debt Camel) says
Go back to the adviser that set up your DRO about this. Sorry, your adviser knows all the details and there isn’t any point in me guessing.
Sam says
Thank you for your reply Sara I’ve just spoke to 02 and I’m only 1 pound over 😅 they said the pound won’t make any difference as the figure is basically correct on my dro just missing one pound
Sara (Debt Camel) says
excellent.
Sam says
Hi my partner has a DRO in England and has been offered work in the Republic of Ireland, could you offer some insight as to what would happen if he moved there? Thank you!
Sara (Debt Camel) says
You can leave the country with a DRO and also work abroad. He should tell the Official Receiver about the new job and his changed expenses – different rent, bills etc. If this means he has too much “spare income” then the DRO may be cancelled – it would be a good idea for him to talk to the adviser that set up the DRO about this possibility now, before he accepts the job.
James says
Hi I am looking at apply for a DRO but would like to try and keep my overdraft and PayPal credit facility for future emergency and budgeting use.
Can I clear the balance of my overdraft etc with my credit card before apply for the DRO so I have a chance of keeping them?
Sara (Debt Camel) says
Can I clear the balance of my overdraft etc with my credit card before apply for the DRO
No.
And even if you do clear the overdraft the bank may close the account.
I suggest you plan to start afresh with no overdraft. The charges are lethally high, not an aid to budgeting.
rachel says
Hi sara,
i am looking into getting a DRO but i have been turned down due to the fact i am on universal credit (and by the end of september the £80 a month uplift will be scrapped) the advisor is telling me that my budget will therefore not be correct and has referred me for bankrupcy instead based on this. This seems unfair and i would also assume this applies to everyone on UC? is it worth looking to another provider as i would like to avoid bankrupcy if possible. Thank you
Sara (Debt Camel) says
that is very odd advice – who told you that?
Rachel says
Hi Sara
I believe it was PayPlan. I thought the same. Seems very unfair
Sara (Debt Camel) says
very odd. I suggest you contact National Debtline who do a lot more DROs than Payplan and talk to them about a DRO.
It is of course better if you have a budget that “balances” and the possible decrease in UC may leave you in difficulty. But that is not a reason to prefer bankruptcy to a DRO!
Rachel says
Thank you! I will do that
Hatch says
Hey!
My DRO was accepted 4th of May and all account totals were correct when it was sent off to be considered 29th of April. The bank I hold a loan with; is included in the DRO. Has the account balance at £150 more than the total I provided. Once my DRO is completed, will I be expected to pay the difference or should I just keep quiet and hope for the best as the letter they sent me merely states that they need to notify credit references and still provide me statements… “however, as long as you keep to the terms of the debt relief order, you don’t need to take any action.” Its money we don’t have as the overdraft was in a joint name and will still be coming from our joint income, just my OHs account, as we’re both currently unemployed. Thanks in advance for any advice you can give me.
Sara (Debt Camel) says
Unless this extra £150 would take your DRO debt total over the £20,000 limit, this isn’t usually a problem. I suggest you tell the adviser who set up your DRO about it.
BUT what is your husband’s debt situation? Can he manage all the repayments?
Hatch says
Hi again, it wouldn’t take me anywhere near the threshold thankfully I just didn’t want to plead ignorance over it if they’re going to tail me down for it despite the DRO or whether the bank will just accept it as being included in the DRO?
Everything was in my name so the repayment for the overdraft will be manageable, albeit lower and slower than they might like.
I remember seeing that they can’t add on extra amounts to the DRO once it’s in place so I wondered how it would work with situations like this where the charges were added mere days before it was accepted. Am I just better off leaving it alone and not mentioning it to the bank, that I actually still owe them money as I’m still not allowed to pay anything towards it for the next 12 months so it wouldn’t benefit me to do so for the small amount they could claim over me?
I do need to add, both the overdraft and the loan were frozen up until the 21st of June so they shouldn’t have applied monthly charges to the loan anyway?
Sara (Debt Camel) says
Please talk to your DRO adviser. It is usually pretty easy to get small changes in the amounts of debts that were listed in your DRo corrected. The DRO adviser may not even think anything needs to be done. But it would be good for you to know.
Hatch says
I was under the impression that once a DRO is accepted you can no longer make changes to it? Hence my query.
Sara (Debt Camel) says
You can’t add a debt to it that has been missed off. but please talk to your DRO adviser.
Laura says
Hi,
My DRO has just been approved. I didn’t have an overdraft on my Lloyds bank account but I do have a credit card with them which is listed on the DRO. Lloyds today have frozen my account, I can’t get to any of my money at all. I phoned them and they’ve said I have to go into branch to withdraw as my account is now closed.
Is this normal? Can they withhold my money?
Thanks
Sara (Debt Camel) says
Lloyds often close all bank accounts when someone has gone bankrupt, had a DRO or IVA.
You need to open a new basic bank account with another bank – luckily there is now a good choice of these, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
No they shouldn’t withhold your money. A DRO is not like bankruptcy where the Insolvency Service asks for accounts to be frozen, this is just Lloyds being difficult.
Laura says
Thank you so much for the quick reply! You have reassured me that I can go to Lloyds on monday.
I had already opened an account with NatWest and I’ve arranged my wages to be sent there too. I’ve just noticed that they aren’t on that list of accounts- do you think this account will be okay?
Sara (Debt Camel) says
NatWest are on that list, under RBS. I think that should be fine – let me know if you have problems?
Jensen says
I am about to apply for a DRO –
A Few months ago I received £6000 for my children as inheritance from their great grandfather. Obviously this shows on my bank statements. Is this going to cause an issue? It was less than 3 months ago.
Thanks
Sara (Debt Camel) says
so it has been moved out to bank accounts in their names? They were names in the will?
Jensen says
Hi, no this was a verbal request from my grandfather to my Nan & Father to arrange. This was deposited via cheque in to my account. I do have a letter from my father as executor of my grandfather’s estate, that states this is a one time gift for my children & as such to only be used for the children. Having spoken with Payplan they seem to think this should suffice. However I do not want to pay £90 for my application to be rejected.
Thanks for the swift reply.
Sara (Debt Camel) says
If Payplan are setting up your DRO and they say it is OK, then follow their advice!
Jensen says
Thanks again.
Can they use our bank statements as a reason to not offer a DRO? We have spent a fair amount on things that maybe aren’t classed as essentials. However we wouldn’t be in this situation had we been ‘sensible’ with money in the first place.
Sara (Debt Camel) says
Not because you have been buying inessentials, no, that is not a reason to refuse a DRO.
But two points.
If the Insolvency Service thinks you have been reckless, then you may get a Debt Relief Restriction Order. But these are rare – many people worry they have been foolish before a DRO and don’t get one. Also in practice one doesn’t make a difference to most people’s lives. See https://debtcamel.co.uk/bankruptcy-restriction-order-bro/ which looks at BROs and DRROs.
Your debt adviser will look at how much spare income you will have a month on a sensible spending pattern.
Hannah says
Hello, I’m thinking to apply for DRO, the thing is I’m not behind with payments as I work but I have zero income left over once all the money has gone on my debt, I have big childcare fees now too as I have a baby who’s in nursery. I was wondering if I’d be eligible, I’m getting the impression that most people applying have stopped making payments to their debts. I’m making the payments and just leaving myself with nothing. Any advice would be great as I’m feeling sooooo stressed. Thank you!
Sara (Debt Camel) says
You can get a DRO if you are still up to date with payments.
You need to talk to a debt adviser about a possible DRO and your other options – I* suggest you call National Debtline on 0808 808 4000.
colin says
Hi, what can I do if I have debt in a Ltd company which effectively stopped trading with the first lockdown? I now work as a self employed handyman. I’ve read I can’t obtain a dro if I’m a director of a company. Can I dissolve the company with debt and then apply for a dro for my personal debt?
Sara (Debt Camel) says
Talk to Business Debtline – they will explain what you need to do: https://www.businessdebtline.org/
Colin says
Thank you!
Liam says
What counts as an asset please?
My income is maxed out each month and having to reduce my hours from September due to a health condition, I would probably lose my job if I didn’t. I didn’t want to stop making payments to my creditors until my hours reduced but I also feel like I don’t have any spare income at the moment although would if I stopped paying creditors which would help in the time ahead when my hours do reduce. Is it ok to stop paying and put through my DRO in September. Having discussed my incomings and outgoings with step change I would be eligible for a DRO.
I’m also concerned that I have spent on credit cards recently. i actually withdrew cash that I desparetly needed at the time and am basiclly at my limit. Is it likely I will get restrictions for this?
Thank you.
Sara (Debt Camel) says
I am glad you have talked to a debt adviser – your previous hope of getting through with an expensive debt consolidation loan looked unlikely to work, especially if your health was a problem.
It takes a couple of months to set up a DRO, so if you start the process now with StecHange it can be ready to go when your income falls in September.
An asset is something valuable you own. Not your clothes or everyday household furniture. It is the second hand value that matters, not what you originally bought it for – so what you could sell something on ebay for. IS there anything in particular you are worried about? It is unusual for the asset limit to be a problem in setting up a DRO.
If you have been having to withdraw money on a credit card, then that sounds like you cannot afford to make the normal repayments to your debts, What did StepChange say? In the run up to a DRO it is important to treat all your creditors the same – pay them all in full, don’t pay them anything or offer them all £5 a month… You should also stop using the credit cards… StepChange should have suggested what you should do?
Obviously I don’t know what you have been spending the money on that meant you had to take cash out. If it was going on essentials and paying off other debts, I would be surprised if you get a restriction – they are pretty rare. Almost everyone going for a DRO or bankruptcy thinks they made some foolish decisions – that doesn’t mean you will get a restriction – see https://debtcamel.co.uk/bankruptcy-restriction-order-bro/
Liam says
Yes, shortly after speaking with you I went off sick for 2 months and due to return on Monday. It’s not been a fun time either.
I withdrew money on a credit card for gambling on 2 occasions £100 on one card and £150 on another. It was stupid of me but was struggling to pay for a few things and then had to subsequentally take a payday loan out. That’s my worry. It’s a silly situation I know. I won’t be doing it again.
I won’t be using the cards again.
I spoke with stepchange and just went through a dummy run to see if I would be eligible with my incomings and outgoings but never went through everything as I wasn’t sure of my situation at the time but I think it’s for the best.
Assets – It’s more like my son’s Nintendo switch that was from Father Xmas (he’s 5) but was part of a mail order account last year on BNPL and a 2nd smaller fridge for the conservatory purchased at the beginning of the year.
Sara (Debt Camel) says
So these are small amounts of cash on gambling – they haven’t contributed a major part to your insolvency. And the second hand value of those “assets” is not going to be large – and they were bought before you went off sick for two months, at a point you were expecting to be fine without insolvency.
This is never totally predictable but I would be surprised if you get a restriction.
I suggest you phone StepCHange and say you would like to proceed with a DRO in September, can you strat the process now, and ask what you should be paying your creditors until it is set up.
Liam says
Thanks Sara. I have spoken with stepchange and advised me to gather all my debts up first and then once we know everything, look at the options with a view to putting a DRO through in September (if that’s what is decided) and to possibly be able to put a hold on the other debts. I will call around on Monday.
Thanks again.
Liam says
So I have now been put on to Breathing space after completing all the information, Stepchange were really helpful and found this process very simple. This has helped me ensure I can have that time to weigh up all of my options and have confirmation from my work as to my hours.
If people are struggling with what to do then speaking to stepchange and if eligible and the circumstances suit, taking breathing space for 60 days, is very helpful.
Amy says
Hi I’m in a DRO can’t find anywere if I’m Abel to get out a phone contract?
Sara (Debt Camel) says
If you want a new handset, then the contract normally involved paying for the handset “on credit” over the term of the contract, typically 2 years.
There are two problems.
According to the terms of your DRO, you can’t get credit of more than £500 without informing the lender about your DRO.
And second, a lender may reject an application because of your bad credit.
If you have a handset, getting a sim-only 30 day contract is often the best option.
Liam Attrill says
Hi Sara,
I have a similar question on that. I am currently on a phone contract with vodafone. I will be looking to enter into this DRO in September. My work have not been able to offer the reduction in hours I was hoping for and had to hand my notice in, as I can’t continue the way things are (I am now off sick again with lower back issues, muscle spasms etc..).
I have done a budget calcualtion based on our outgoings to include my wifes wages and any potential benefit amount I am likely to receive and lilterally having to break even each month, there or thereabouts (that’s the reason for the DRO I guess). I need to somehow make some further cuts. The only thing I can see is to not have to pay my Vodafone bill of £44pm and look to get a pay monthly sim that my wife could take out, which is much cheaper. I am not in debt with vodafone yet, so would I have to not pay them this month to then be able to add them to the DRO?
Thanks as always.
Sara (Debt Camel) says
That sounds like a sensible way forward. If you want a DRO in September, start talking to an advice agency now as they take time to set up.
Liam Attrill says
Thanks Sara. Yes, I am currently on breathing space with a view to enter into this dro via step change.
I’m hoping I can find some part time work within the nhs before the end of September, which will at least give some extra income but I’m just looking at worst case scenario of course.
Thank you for your help and advice
Liam Attrill says
Hi Sara, I’ve just received a response from the adjudicator at the fos to advise loans at home to pay me the interest etc for 3 out of 4 loans. He has asked them to respond by 26th august with any additional evidence or ask it to be looked at again if they wish.
How long does that take with regards to a layout if they go ahead with the decision do you think as I’m worried how this may affect my dro. It won’t be more than £1000 I would imagine.
Am I ok to still receive that when it’s paid if in a dro or is it worth holding off considering my assets won’t total £1000 when I go into the dro?
Thank you.
Sara (Debt Camel) says
You HAVE to know what your possible refund from Loans at Home would be before you make a decision on the DRO.
DO you know the details for the three debts the adjudicator has said to refund – what you borrowed, what you received in cash if the loan was a top up loan, how much you paid in monthly payments?
presumably, they are the last three? Do you still owe a balance on the last one?
Liam Attrill says
I do but I’m not sure what you can take from it
Weekly Rate Weeks to Settle Capital Charges
£10.00 70 £400.00 £350.00
£15.00 14 £375.00 £300.00
£10.00 1 £200.00 £130.00
It’s looking to be a lot less like £4-500
Sara (Debt Camel) says
I am not sure if that last column is the interest and charges you actually paid. Or the ones that were quoted at the start of the loan. Do you know?
They add up to £780. There should be some 8% interest on top, depends how long ago the loans were.
Getting a windfall of up to £2000 is ok in a DRO. It does depend a bit on what assets you had at the start but if you are well under 31000 (and most people are ) you should be OK.
Liam Attrill says
Unfortunately they are the charges I who’d have paid, not what was paid. Hard to do a calculation based on that. I’m assuming it’s under £500 in total.
Do loans at home take long to arrange payment?
Assets will be around £500 I think max
Sara (Debt Camel) says
I suggest you ask LAH how much interest and charges you paid on the three loans. I’m sorry but I don’t see enough details of LAH cases to be able to make a safe guess.
Nor do I know how long they take to pay – but first they need to accept the deciaion.
Liam Attrill says
Thank you sara
John says
Me and my partner doing a dro after our two months of “breathing space” . Citizens advice said we just met the “less than £75 left” criteria on my basic wage, but that was two months ago and since then I have had to do £200 worth of overtime a month at work on a temporary basis due to short staffed because of Covid, so when we hand my wage slips in they will show we have more money coming in than two months ago, but like I say the overtime is temporary so will this effect chances of a dro thanks
Sara (Debt Camel) says
does your partner work?
you need to explain the situation to your DRO adviser – they may want to wait a couple of months and see if the overtime continues.
Louise says
Hi Sara, I have done a budget with National debt line but I have a car on PCP, the payments for my car are all upto date and I need this to commute to work and for everyday travelling, I have fibromyalgia and find it difficult to walk any distance, it would cost me more to hand the car back, the car finance said they are happy for me to carry on paying for my car if I can get a (non adoption letter) from the DRO , however NDL are not sure if my car will be accepted has an essential.
Can you advise on this please
Sara (Debt Camel) says
are you getting any disability benefits?
Louise says
No not at the moment, I have however received a pip form which I need to complete,
I was unsure though if I did get awarded pip if this would take me over the £75 allowed
Sara (Debt Camel) says
Have you told your debt adviser you are applying for PIP? Getting PIP itself wont take you over the £75 limit if you are currently under as you can include a line in your expenses for “disability costs” – your adviser will explain this.
But it would help to show why you need the car. Also ask your debt adviser if getting a letter from your doctor would show you need the car now.
Louise says
Hi Sara So on the original question regarding the car on PCP would this be something that would not be acceptable unless I was successful in a pip application
Sara (Debt Camel) says
I don’t know why National Debtline think it isn’t essential. I am suggesting you tell them it is needed because of your disability, say you are applying for PIP and ask if a letter from your doctor now would help them say it is essential.
Anita says
Hi, can you tell me if Special
Guardianship Allowance is classed as income when applying for DRO?
Universal credit don’t count it as income and I don’t have to file tax returns as self employed.
I have a DMP that was recently increased, but my benefits will decrease by more than my DMP payment this month.
Sara (Debt Camel) says
Yes it is counted as income, but you can include the associated costs of looking after the child as expenses.
How much are you paying to your DMP at the moment? Your income is going to drop because of the UC cut, any other reason?
Ann says
I have just been told in a webchat with National Debtline that the insolvency service needs to see all bank statements but your website says “The Insolvency Service doesn’t need to see your bank statements.” Could you confirm which is correct please?
Sara (Debt Camel) says
Your DRO adviser will want to see your bank statements.
Ann says
Thank you, however, I have been told today by National Debtline that the bank statements will be sent to the Insolvency Service with the application and other documents needed for the application. Please could you confirm if this is correct?
Sara (Debt Camel) says
If that is what they say they send, then that is what they attach. Does it matter?
Catherine says
Hi,
If i set up a DRO for myself, will it effect my 14 year old’s bank accounts too?
Sara (Debt Camel) says
You can’t set up a DRO for yourself, it has to be done by a debt adviser. (You probably already knew that, but it’s worth making clear, just in case.)
Your child’s bank accounts are not affected unless you have been making unusually large payments to them. Talk to a debt adviser about this – I suggest National Debtline on 0808 808 4000 – but this isn’t usually a problem.
Dee says
Hi,
I have a credit card debt that I took out about 2 years ago. I paid it for the first 9 months or so until I ran into trouble. However, I lied on the credit application and said that I had a job, when I didn’t. The debt has since been sold on for non payment.
I want to clear my life up honestly so I can start again. Can you advise me if this information will need to be revealed? Or what I might be asked about this?
Thank you
Sara (Debt Camel) says
How large is the this debt? Do you have a lot of other debts or arrears on bills? It sounds as though you ran into trouble during COVID-19 time.. was that partly responsible for your problems?
Magdalena says
My DRO was approved last year on january. I read that they are some changes like spare money you can be left with is 100 not 50 a month. Will new rules apply to me now or previous ones when I applied?
Many thanks for any advice
Magda
Sara (Debt Camel) says
it is the new rates that apply, but that are £75 a month not £100 a month. See https://debtcamel.co.uk/dro-income-up/
Are you in work? getting Universal Credit?
Many people’s energy bills will be going up – that will reduce the amount of “spare” income you have.
Toni says
Hiya im currently going into a dro and my sister is thinking about it to but she’s worried that she’s going to loose her tenancy and has only been living in the property not even a month yet but she isn’t behind on rent or have any rent arrears will this affect her tenancy and also she has a studio account which she’s been paying just fine each month as it’s only £10 a month and that’s for her daughter who’s 2 and for Xmas and she’s worried she has to put that into her dro please can you help
Sara (Debt Camel) says
If she doesn’t have any rent arrears, she should not have any problems. She should talk to a DRO adviser about this who will be able to reassure her.
But she will need to include all debts including the Studio account.
Perhaps her daughter won’t have so many Xmas presents – but at age 2 she won’t notice… and then your sister will be able to save up some money and buy next years Xmas presents with cash.
Larah says
Hi
I had previous debt with one of my Halifax accounts, but they sold off the debt to link. I have 7 accounts with Halifax one current and the rest kids savers. I technically owe them no money. Will they try to freeze the accounts? What’s the best thing for me to do?
Sara (Debt Camel) says
Is that your main account?
Marie says
I have seen in the news there is a possibility that all those on legacy benefits may receive a backdated lump sum of around £1500 if the discrimination case regarding the £20 extra for Universal Credit recipient is successful. I’m currently in a DRO and am on ESA (support group component) and also receive housing benefit – these are my only source of income. I understand it’s classed as a windfall so would obviously declare it to OR if did receive but what are the chances of it affecting my DRO? I don’t have any other assets and I know the limit is £2000 but it could be nearer to that by the time the court case goes through etc. Also – do they open up the whole case again and want evidence again of current income or statements etc or would they just take this information separately and base a decision on that? I have mental health issues and was very affected by having to sort everything I needed to provide with this so just want to be prepared in case
Sara (Debt Camel) says
If this happens (and I do not want to get your hopes up that it will) then the Insolvency Service may well take a policy decision about whether it should disregard these payments.
There has also been a recent legal case saying that where a DRO has been revoked (the legal term for ended because you don’t meet the criteria) then someone is entitled to apply for another DRO. At a guess the Insolvency Service would not want this to happen to hundreds, possibly thousands of people.
Marie says
Thank you for the reply – I feel more reassured to hear that
Rebecca says
Hi there
I have a problem with my dro and looking for some advice. I am currently a few months into my dro and one of my creditors has contested it and I have been asked to provide information to the Official receiver. I have been for nearly 2 years worth of bank statements.
I am really worried, I don’t know what the OR is looking for or if I will be in trouble?
Any help to put my mind at ease would be appreciated
Thanks
Sara (Debt Camel) says
I can’t really guess what is happening here – it is incredibly rare for you to be asked to send the OR any information like this during your DRO. Who set up your DRO for you?
Rebecca says
Hi thank you for responding.
One of my creditors is a personal creditor (a previous friend)
The email states they have received a complaint from her and then asked me to provide bank statements but they want for almost 2 years worth.
I have been back and forth with this person on legal issues for almost a year and have even had the police involved. What will happen if I don’t send the information to the OR? Or do I need to comply.
it was citizens advice
Thank you
Sara (Debt Camel) says
You absolutely must comply. If it will take some time to get bank statements, send what you have to the OR now and explain you have asked your bank to send copies of the earlier ones. You will still be able to get these even if the account has been closed.
I suggest you also go back to Citizens Advice and tell them what has happened and go into detail about your history with this creditor – they may be able to guess what the potential problem is, but I can’t.
Jane says
Hi,
I would like to know how far back do the DRO officers usually need back statements to be?
Sara (Debt Camel) says
It’s up to the adviser.
guy says
I am thinking about getting A DRO. But am confused. I have 3 items on HP agreement, the payments are up to date. They include A TV, Soundbar and our sons Nintendo switch. The problem is our son is autistic and relies on these items to keep him happy. Would A DRO mean we would have to return all of these? Tese items were bought to make a sensory experience for him which keeps him calm. It would be a disaster if we had to return these items. Any idea on wether we could keep them and continue to pay the payments? Many thanks from, Guy.
Sara (Debt Camel) says
Do you get DLA for your son?
guy says
Hi Sara, he did but now gets PIP instead as he has just turned 18.
Sara (Debt Camel) says
ok so the HP could be paid from that money?
HP items only have to be listed in a DRO if they are in arrears – but these aren’t.
If you were paying them, there would be the question about whether they were an allowable expense – if they were for a child and the child got DLA and the items are linked to that disability I would expect this would be fine.
If they can be paid from the PIP then again I don’t see what there should be a problem.
I suggest you talk to a DRO adviser about this. Phone National Debtline on 0808 808 4000.
Mrs says
Hi, I paid my fee and rang my advisor yesterday and she submitted my DRO application to the insolvency service. A mixed bag of emotions right now but at the forefront is relief. I’ve found your site and threads amazing and a wealth of information. I know this is a question you have already answered but wondering if there maybe a more “up to date” answer for how long it takes for it to be approved and for me to be notified? As I was on breathing space which ended last week and already have had a bailiff letter so wondering if I should just ignore that or contact them? Thanks :)
Sara (Debt Camel) says
It is normally only a couple of working days… I hope yours doesn’t get caught up in any delays over Christmas.
What does the bailiff letter say? What debt is this for? Have you ever let the bailiff into your house? Do you own a car which is outside?
Mrs says
Hi Sara, thanks for replying and apologies for not responding sooner. That’s a concern that it’ll get held up because of Christmas, but I’m crossing everything it will be approved by the end of the week.
The bailiff letter says
“breathing space ended –
We write to notify you that your account is no longer on respite hold, we are therefore continuing with our proceedings to recover your outstanding debt.
We therefore ask that you pay your remaining balance in full within 7 days of the date on this letter”
Then the ways to pay etc.
Its for a housing benefit overpayment, they haven’t come on to the house yet, it’s just been letters and I don’t own a car.
the date on the letter is the 14th December
Any help/advice would be amazing :)
Mrs says
Hi, I just wanted to update, I received my email this morning telling me my DRO had been approved.
Thanks for all your advice and I’ll be back once the 12 months period is up, although I have already read your informative articles about after the DRO, be good to have a refresh for when the time comes.
Sara (Debt Camel) says
excellent – Have a peaceful Christmas!
Sara (Debt Camel) says
To be clear, I don’t expect your DRO will be delayed.. but over Xmas and with staff going off sick things can never be guaranteed.
And there is a reasonable chance things will also go a bit slower with the bailiff, but again that can’t be guaranteed.
You could:
a) tell the bailiff you have applied for a DRO
Some bailiffs may halt collections if you tell them you have applied for a DRO. Some won’t. The nightmare is that a bailiff may decide to move faster if you do tell them this as they only have a short window to try to get anything from you or get you to let them into your house. My guess is not many will do this, but is it worth the risk?
b) tell the bailiff something else to buy time (which would probably involve lying to them)
c) ignore the letter and if the bailiff turns up (which they may not until your DRO is done) you refuse to open the door, see https://debtcamel.co.uk/bailiffs-dont-open-door/
Obviously as soon as you get the DRO you should tell the bailiff and the local authority (as this is a housing benefit overpayment).
If you are really worried, talk the debt adviser that has done your DRO now and see what they say.
Mrs says
Amazing advice, thank-you!
Like you say, hopefully it won’t be delayed but especially with adding covid into the mix it may get delayed. Just keeping things crossed at the moment that it gets approved in the next couple of days.
As for the bailiffs, you’re right. In my eyes it’s not worth the risk telling them just yet just in case they do try and move faster. I don’t really want to lie to them so going to go with C I think, as if nothing else hopefully Christmas will go in my favour a little with slowing things down.
Again, thank-you for your help with my query and everything else you’re doing.
Hope you have a great Christmas and new year. X
Mark says
Hi around 2013 I went into a joint DRO. Unfortunately I’m looking into it again as of 31/12/21. Im currently in a joint IVA just over a year now, an it’s not working with the £178 plus a month. Missed a few payments recently as Couldn’t afford it. Too much. An we’ve got into – somehow added extra debt outside my IVA, plus rent arrears. Is it a long shot try for a DRO now an chances of being accepted?
Sara (Debt Camel) says
You can’t have a joint DRO – both you are your partner must have had separate ones. This is important as when you are looking at new DROs (you are over the 6 year point so this may be possible) you have to assess the criteria seperately.
So… how large are your current debts, including all the ones in your name and in joint names, in the IVA or not.
Then same question for your partner – how large are the debts in their name and in joint names, in the IVA or not.
How much of the joint debts are rent arrears?
Are you both working? Getting any benefits?
How impossible is the £178 – is it just recent petrol increases say or has it been a problem for a long while?
Have you just had an IVA review? Did you tell them that £178 was too much?
This is going to sound like an odd question, it may not be relevant for you… But when the IVA was set up, was it suggested to you that you reduce your expenses and change your income as that would make the IVA more likely to be accepted?
Paul says
Hi I have not paid any council tax for the current year so currently I owe 1800 pounds for this current year April 21 to March 22. I am entering a dro which will go though soon and included this but now I’m told the council maynot agree to clear this debt through the dro as I don’t have a liability order against me. The last council letter I had in Nov stated I should pay 600 on Jan 7th feb7th march 7th. I have missed Jan 7th already and not paid. Any clarity
Sara (Debt Camel) says
now I’m told the council may not agree to clear this debt through the dro as I don’t have a liability order against me.
who said this?
Paul says
The guy at step change said that maybe the case as its still the current year and that my liability for the full year is up until end of march this year
Mrs says
Hi,
Just wanted to add my experience of a DRO and council tax for current year.
My DRO was approved on 21/12/2021 and that included this years council tax too along with other years.
I haven’t heard anything from the council (yet at least).
Just wanted to let you know and hopefully it will put your mind at ease a little.
Sara (Debt Camel) says
This is what gov.uk says:
“Any amount due and unpaid under an instalment agreement up to the date of the DRO being approved is a qualifying debt.
If the debtor’s council tax is up to date under the instalment agreement at the date of the DRO, no amount should be scheduled in the DRO application as any unpaid balance relates to future occupation.
Where instalment payments are in arrears and the debtor has defaulted on a reminder or final notice, the whole of the remaining liability for the year becomes due and payable. In these circumstances the whole of the amount is due and payable and is a qualifying debt whether or not the council has obtained a liability order.
Where the council has obtained a liability order prior to the making of a DRO, the whole debt as notified within the liability order is due and payable and should be treated as a qualifying debt.”
I don’t think you will have any trouble. Point the guy at StepChange to https://www.gov.uk/guidance/debt-relief-orders-guidance-for-debt-advisers#council-tax
paul ivey says
thank you so much I will mention this when I phone him. out of interest if we put the full amount as a debt and then they say only part of the amount is the debt will they still reduce the part that falls into the debt eventhough we have put all the amount?
Sara (Debt Camel) says
I don’t think I have come across a case where a creditor says only part of the debt should be included but the rest still exists as a debt.
A very large number of DROs contain council tax arrears for the current year – this is not a normal prpblem.
Ryan S says
Dear Sara …. Could I check one thing as I think I may be being palmed off. I had a DRO made against my debts last April 12th 2021. I notice that all my accounts on my credit report have been defaulted for April 2021 when the DRO was made active. Amigo have not defaulted my balance and still continue to put a missed payment marker every month. I have sent a letter template you had on here to ask the to update my report and default it but they say they do not do it that way. They wait until the end of the order to then default it. Is this correct what they are saying as it seems odd that they are not showing correct information on my one credit report. I have made a complaint to them but they say that that is their procedure end of. Thank you.
Sara (Debt Camel) says
it makes no difference what they do during the DRO year, what matters is at the end of the year the correct default date is added. I would just ignore this at the moment.
Ryan s says
That’s great. I shall wait to April and see what they do in May s update. Thank you again
Sam says
Hi
I have My DRO accepted on December 2019
Can I apply for credit card (not bank ones)to build my scoring .thanks
Sara (Debt Camel) says
See https://debtcamel.co.uk/repair-credit-record-dro/ which explains how to repair your credit record after the DRO year has finished.
Gareth says
My DRO adviser has included my mobile phone as part of the essential expenditure. This includes both line rental for the mobile and rhe handset loan agreement. I am not in debt with my mobile provider. Do I need to move this from expenditure to debt?
Sara (Debt Camel) says
It sounds as though your DRO adviser is happy for you to carry on paying this. Do you want to? Or would you rather move to a sim only? Talk to your DRO adviser about this choice, it depends on the rest of your income and expenses.
F says
I’m really worried because it’s been more than 48 hours since Stepchange submitted my application and I haven’t heard anything back yet. Does this mean the Insolvency Service is looking into my application in more detail?
Sara (Debt Camel) says
StepChange will get an email the day it is approved but the IS then sends you a letter in the post… So this may already have gone through but you haven’t yet received the letter.
If there was anything unusual about your application, StepChange would have told you about it – if there isn’t, it is VERY VERY VERY unlikely that there is a problem.
Fingers crossed for you!
Nikki says
Hello,
I’m just waiting for my DRO application to be accepted.
Will they accept if I have £700 left in my bank account or does it have to be less than £75? & do they look at bank statements also?
Thanks
Sara (Debt Camel) says
You are allowed assets of £2000, so the £700 is part of that. £2000 may sound low, but it doesn’t include clothes (except for your mink coat and Hermes bags!) or normal household furniture and white goods. And it is the second hand value – what you could sell something for. Which is very little for tech and household goods! People don’t often have a problem with this limit.
And if you are just about to spend a lot of it on rent and bills, you don’t really have much money at all!
Nikki says
I earn £1500 a month. I pay all my bills and rent and what I have left is £700.
I’ve got £11k in debt. So technically I have £700 left to play with, I’m just hoping my DRO will be accepted.
Sara (Debt Camel) says
which advice agency is doing your DRO?
Nikki says
I’ve gone through Citizens Advice
Sara (Debt Camel) says
That’s good, if your adviser thinks your DRO will be fine, then it should be. Very few DRO applications are rejected, less than 1%
Ron says
Hello. I am in the early stages of applying for a DRO through an approved debt counseling charity. One of the credits cards taken into this process is a Santander Credit Card which I got at the time I started my Santander Savings Account and Current Account around 20 years ago. As the credit card will be affected by the DRO would there be any effects on my Current and Deposit accounts? In addition I have another Current Account with them for the sole purpose of administering my Direct Payments for paying for my care needs only. It was set up at the instruction of my local council to receive payments for my Social Services care package and distributing payment to my employed personal carer (wages, tax, NI, Pension etc). Would this account be at all compromised?
Sara (Debt Camel) says
is there anything in the deposit account?
You need to explain about the second current account to your DRO adviser – this won’t cause a problem from what you have said, but the adviser needs to know about it.
I am sorry but I can’t say for sure what Santander’s current policy is on closing bank accounts – they may well just downgrade the account to a basic bank account with no overdraft facility. But it is possible that you will need to move your banking to another bank. See https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
Mrs says
Hi Sara,
My DRO was approved on the 21st December 2021. Since then Lowell have already adjusted my credit file and others have stopped sending me letters etc..the enforcement agency sent me a letter to tell me they were returning my debt to council..I’m assuming that’s because enforcement can no longer take place and I shouldn’t worry?
But the energy supplier company have been harassing me to pay the debt (which is listed on my DRO) they sent me a final demand letter last week advising me that someone was coming out to my property tomorrow, I phoned them and advised them I had a DRO and they should have already updated their system..apparently the insolvency agency hadn’t given them my DRO number? I did give it them, although they wanted me to ring round the houses and ring them back for some reason, but I just gave them my DRO number and told them to check themselves if they needed to.
I got another call back saying that their systems had now been updated to show my DRO etc but if I get any more letters I should “give them a courtesy call”. I suffer badly with my mental health, partly the reason for me going for the DRO in the first place.
My question is..where do I stand with this energy supplier if they continue to harass me?
Thanks :)
Sara (Debt Camel) says
Yes you don’t have to worry about the bailiffs, they have returned the council tax arrears (or whatever the debt is) to the council.
Any further trouble from the energy company is very, very unlikely. It is just a settling in problem until their system was updated. Any more trouble, tell the adviser that set up your DRO.
Mrs says
Ok, brilliant.
Thanks so much Sara x
Mrs says
Hi Sara,
So sorry to bother you again but the energy company have sent me an email this morning..
“ We have not received any notification of Debt Relief Order from the Insolvency Service.
It may be that we are not included as creditor. Please can you send in a copy of Order with copy of Debt Schedule so that we can investigate?”
I don’t know what do to or what they’re asking for, I don’t know what the debt schedule is? Is it the list of creditors?
Sorry to bother you again and hope you can help.
Sara (Debt Camel) says
Yes. You will have been sent a letter at the start from the IS saying your DRO was set up with a list of the debts included.
Mrs says
I’ve just sent that over now and going to give IS a call too as that’s what stepchange have advised. Thanks for your help Sara (again) x
Ron says
Hello again Sarah,
The deposit account usually runs at under £10 and is only used really to accept my PIP payments which I then transfer to my current account.
I have just now telephoned Santander to inform them of the probable DRO coming down the line and was assured that even though one of the credit cards which will be impacted is the card I hold with Santander, my other accounts will be unaffected but of course the credit card will be suspended. I hope this is the case. I will inform you if anything different happens.
Ron.
Sara (Debt Camel) says
Thanks, that would be very helpful. It is always good to have a recent report on what has happened,
Good luck with the DRO – you shouldn’t need it, but a bit of luck never hurts!
Ron says
Dear Sara
I made an appointment to speak with an employee at my local branch who was incredibly supportive and contacted various people within Santander to get a firm response. I was told that my debt with their credit card would not lead to funds being taken from my other accounts and this was recorded electronically on my records within their system. It may lead to my overdraft facility being withdrawn and types of direct debits with varying payments from those accounts being limited, but not necessarily so. They appreciated the advance notice of an impending DRO and were very accommodating in their assistance.
My advice throughout this time was with CMA – Community Money Advice at a local help centre run through the Reform Church In Hull. Trained volunteer advisors collated all information and evidence and dealt with all creditors on my behalf. Upon completion of the financial statement it was forwarded to their Head Office on Monday of this week. On Tuesday of this week I got a call from them for me to confirm all the information they had been given. The £90 application fee was paid. Today (only 2 days later) I received email confirmation from the Official Receiver at the Insolvency Service that my DRO has been approved and I am now in the moratorium period for a period of a year from today’s date.
Sara (Debt Camel) says
thank you for the update.
G says
Hi me and my partner are currently on a token payment plan and will be changing onto a DRO (separately) when the token payment pay has ran out/running out stepchange told me the TPP is in place for a year but my question is will we be able to keep our current mobile contracts (get new handsets when the contracts end but stay will current contract provider) once the DRO is in place? Also will we still be able to get a new home broadband contract? Thank you
Sara (Debt Camel) says
I am not sure if I am missing something here, but there is no reason to wait until the arranged TPP ends – if a DRO is the best option for you why would you not have it now?
G says
They have given us time to think about it as we weren’t completely sure to do it as its a final decision but we are thinking to go ahead with DRO now but as above I need to make sure our existing phone contracts and any home broadband contracts will be OK, also my partner did a few hours overtime over Christmas and will receive last overtime payment this month will this affect a DRO application? Thank you
Sara (Debt Camel) says
ok so your phones and broadband – are you up to date with the current contracts? Are these “normal” contracts from a mobile co or were the phones bought on HP (pretty unusual)?
G says
Hi yes sorry phone contract and broadband payments up to date and just purchased on a standard 2 year pay monthly contract for phone contracts (sorry I’m terrible and explaining) and will not be including as a debt on the DRO, but want to check we will be a able to keep our contracts (plus any new handsets when contracts run out staying with same company) with a DRO in place? Thank you
Sara (Debt Camel) says
So as there are no arrears, there is no need for these contracts to be listed in your DRO, assuming your DRO adviser thinks they are a necessary expense – which is pretty normal. So you will be able to just keep paying them.
When the mobile contracts come to an end, it sounds as though this will not be in the DRO year if they are recent 2 year contracts? In that case you could look to take new contracts, but generally it is cheaper to switch to Sim only contracts for a year or two, until the handset has to be replaced.
Whether a new supplier will accept you for a new broadband contract is a commercial decision for them. It isn’t something that I have heard many grumbles about.
Moneysupermarket.com says:
“Plusnet and Now Broadband don’t carry out credit checks. So, if you’ve got bad credit and want home broadband, they’re a good bet.
TalkTalk, Virgin Media, Sky and BT all check your credit rating before accepting you as a customer and will likely all use different rating criteria.
Remember these checks aren’t as stringent as the checks you’d have to pass to get a loan, mortgage or credit card. So even if you have got bad credit, it doesn’t necessarily mean you won’t be accepted.”
Also you need to remember that your credit ratings will already be damaged by making token payments. There are no nice solutions to a debt problem that do not affect your credit record.
Presumably, you can carry on with your current supplier? If you are getting Universal Credit you could also look at social tariffs, see https://www.ofcom.org.uk/phones-telecoms-and-internet/advice-for-consumers/costs-and-billing/social-tariffs
Just tell your DRO adviser about the overtime.
Sara (Debt Camel) says
well your DRO isn’t likely to be through by next month, is it?
You can switch broadband or mobile suppliers during the DRO year – but it doesn’t sound as though you will need to?
When the year ends, it’s up to the providers.
Moneysupermarket.com says:
“Plusnet and Now Broadband don’t carry out credit checks. So, if you’ve got bad credit and want home broadband, they’re a good bet.
TalkTalk, Virgin Media, Sky and BT all check your credit rating before accepting you as a customer and will likely all use different rating criteria.
Remember these checks aren’t as stringent as the checks you’d have to pass to get a loan, mortgage or credit card. So even if you have got bad credit, it doesn’t necessarily mean you won’t be accepted.”
Also you need to remember that your credit ratings will already be damaged by making token payments. There are no nice solutions to a a debt problem that do not affect your credit record.
G says
Wonderful thank you so much for all your amazing advice! Sorry one last thing my partner had had a bit of overtime over Christmas (nothing more than than £100 more than his usual wages) his last overtime payment is this week when he gets paid should I wait for a couple more pays to put DRO application in so it doesn’t look like we earn more I have split all our expenditures for the DRO and it leaves him with 44 a month and me 12 I haven’t included his overtime as it was only over Christmas period December till mid Jan (also our TTP is in place until late Sept) thanks
Sara (Debt Camel) says
I would leave the OT out but tell your DRO adviser what it was.
Are you allowing for gas and electricity bills to go up? How do you pay for energy – meter, DD, quarterly bill? Are you in arrears?
G says
Great thanks I pay by pay as you (find it the most cost efficient as It stops us going over I have 2 kids who think electricity is free haha) I have worked it out with new amounts (assuming my bill rises to 2000 per year) thanks
Jason says
Hello,
When applying for a DRO do they check foreign (Australian) bank accounts aswell? Also, How are your assets checked or determined?
Thanks in advance
Jason
Sara (Debt Camel) says
I suggest you talk to National Debtline on +44 121 227 4780 about the process of applying for a DRO from abroad.
Deliberately concealing an asset is a criminal offence.
Jason says
Sorry I think I was a little vague. I am not currently abroad but I do have an Australian Bank Account. Only a few hundred dollars in it. What I meant was, am I required to show foreign bank account statements aswell? I have no intention of hiding anything. I just want to be prepared when I get the ball rolling. And I also wondered how far back I need to submit the documents? And is it for every account (Credit and Debit) that I list on the DRO? As there will be 7/8 accounts and if they require years or more of each one it will be a lot of paperwork.
As for the assets. I have a computer purchased around 18 months ago that I use for work. I see that tools etc. are not part of the asset allocation. Would this also count being a work computer?
Thanks for your help.
Sara (Debt Camel) says
Your IP address suggested that you were in Australia.
Yes you do have to show foreign bank accounts as well.
I suggest you talk to National Debtline about how far back they may want to see statements for.
What could you sell your PC for on ebay? Probably not a lot…. that is the value of that asset. Unless you are self emplyed (are you?) then it is your personal asset.
joeypeterson786 says
[edited out] is a counseling organization that provides debt advice and solutions to people struggling with debt. Every month, we talk to thousands of people who want to get out of debt. We provide you the best loan advice and loan solutions to help you reduce your monthly loan payments and become debt free. For additional information you can contact us on our toll-free number [edited out]. We will provide you with the best possible loan advice.
Sara (Debt Camel) says
Let me helpfully explain some of this…
[edited out] is a counseling organization that provides debt advice and solutions to people struggling with debt.
They are a commercial company and they are not authorised to provide debt advice. They want to make as much money as possible from people in debt by selling them IVAs.
Every month, we talk to thousands of people who want to get out of debt.
Who knows how many victims they actually talk to each month? They just want a number that sounds impressive.
We provide you the best loan advice and loan solutions to help you reduce your monthly loan payments and become debt free.
What they should have said is:
Have an IVA, they are brilliant for us! We will make £800-1000 by referring you for an IVA. Lovely! Well, not lovely for you, you should probably have had a DRO, bankruptcy or a debt management plan. But it’s lots of money for us and it will take you quite a while to realise that an IVA is a disaster for you.
For additional information you can contact us on our toll-free number [edited out].
I have googled that phone number and up pop headlines on google like “Get Stepchange Debt Help, Stepchange Debt Advice” and “National Debt Helpline Number xxxxxxxxxx| Debt Help UK”.
So this despicable outfit is hoping you will call them and think you are talking to StepChange or National Debtline.
No responsible firm would ever do this.
We will provide you with the best possible loan advice.
haha. Their website and latest youtube video say you can’t have a DRO if your debts are over £20,000 – which is simply wrong, the limit is £30,000.
So they aren’t just trying to get you to sign up to an IVA, but they are clueless about what your real debt options are.
——————————————————
If you want good debt advice on your options, talk to the real National Debtline on 0808 808 4000. or any of the good organisations listed here https://debtcamel.co.uk/more-information/where-to-get-help/.
And avoid the adverts on Google, Instagram and Facebook.
Joseph Thomas says
Stepchange is a registered UK charity. Provides free, confidential assistance and advice. If you want to talk to anyone about debt then contact now on toll-free number 0800 138 1111
[Sara – I have edited this comment as the telephone number was not correct for StepChange]
Daniel says
Hi I done step change but because they say I have shortfall monthly that I would likely to be rejected for a dro Is this correct ?
Sara (Debt Camel) says
Was this on the phone or their automated advice system?
How large is the shortfall each month?
Jennine says
Need advice I was on a DMP with step change they put me forward for a dro this was on the 3 rd April I have had no paperwork as of yet and it’s now may 8 th is this normal, as I’m on breathing space this end 2 June ..
Sara (Debt Camel) says
Did they say on the 3rd April that they would start to organise a DRO? or was that the date your DRO application was submitted, after you had paid the £90?
Jennine says
On the 3rd they said they would stop my dmp and send details over to start off my dro I not had any paperwork to sign or send back I’m now panicking a bit ..
Sara (Debt Camel) says
ok, there is no need to panic – your creditors aren’t going to rush to court. But this does sound as though something has gone astray – I suggest you phone StepChange up tomorrow and ask what is happening.
You have stopped paying the DMP? Do you have the £90 saved for the DRO fee?
Jennine says
Yes I have 90 pound put aside . Ok I will phone them tomm . I should of thought something was not right but thought I give more time now I’m quite scared 😟.. thank you for ur help .
And yes I stopped paying the dmp on the day step change said I can go in for a dro . So from the 2nd of June my breathing space end
Sara (Debt Camel) says
I understand why this is uncomfortable, but there should be much of a problem in practice for you. Good luck!
Jennine says
Thanks hope not . Thanks again u been brilliant nice to have someone to talk about it to
Terry says
Hi Sara
If one has made a material full & final settlement to a commercial creditor within 2 years of applying for a DRO, when in a DMP, but have continued to make agreed DMP payments to the other creditors would a DRO be granted?
Example: total owed and included in DMP before full & final settlement £25,000
Payment of £3,000 made to settle debt of £6,000
Apply for DRO a year after the full & final settlement payment made with a potential total debt write off of £18,000. Surplus income is below £75/mth & assets below £2,000 at time of DRO application.
Sara (Debt Camel) says
I think this may probably be OK – talk to National Debtline on 0808 808 4000.