A Debt Relief Order (DRO) is often the best debt solution if you have under £20,000 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.
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 some typical questions about DRO applications here.
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 £50 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 £50 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.
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 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. You may well be right that you will be broke, 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.
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.
Is my car worth what I can sell it for?
You should get a valuation using Parker’s Guide, look for the “private poor” option.
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 parent £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 a claim for PPI or a payday loan refund – should I delay until this is sorted?
It may be best to get on with the DRO now, but read “If I get a PPI 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 insurace contract which still has over a year to run?
You don’t generally have to include “service contracts” such as these example unless you are behind with 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 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 and stop paying any of them – 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 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 is likely to 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 – your DRO Adviser – can submit an application for a DRO. Your DRO Adviser gets the information to go on the application from you and your credit records and you 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 one or two 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. You should keep this letter – not just for the 12 months of your DRO year forever because it is your proof of what debts are included in your DRO. The Insolvency Register is also updated, showing your DRO.
How many DROs are rejected?
Hardly any! The Insolvency Service has published data for 2017-19 showing that in the three years they approved more than 80,000 DROs and rejected only 233, that’s less than a half a percent.
Most DRO advisers have never had an application rejected at all.
If you think your adviser is being fussy, that is because they are doing all the checks so your DRO application will sail through.
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 landlord is only told if you have rent arrears. Unless you have an attachment of earning in place (which will stop) you employer isn’t contacted. 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.
Will a DRO affect my partner’s credit record?
Not unless you have a joint account with them.
Do I have to send in monthly statements?
No! No one checks up on your income and expenditure during the DRO year. If this sounds unlikely, think about what the fees are – your £90 isn’t going to pay for any staff 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 it is always a good idea to 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
Jhon says
Hi sara
On Thursday my DRO will finish the 12 month period
I am very sorry and happy
Happy is finished
And worry if anything goes wrong
My question is if there is any problem do you think the IS will be kintouch by now ?
Or should I start planning a new chapter in my life
Thank you
Sara (Debt Camel) says
Nothing happens at the end of a DRO. No one checks your bank accounts. It’s natural to worry but things don’t tend to just pop up at the last moment. Two days, I will be thinking of you.
Jane says
Mine also ends on Thursday and I have the same worries – is there a set length of time after a DRO finishes that they can contact you if have been any issues?
Sara (Debt Camel) says
No but it is INCREDIBLY RARE for there to be any issues after a DRO ends. This is not something you need to worry about. The insolvency Service would have to go to court to take any action. More than 25,000 people a year have a DRO and my guess is only a couple of cases a year have any problems afterwards.
Jhon says
Hi sara
Thank you
So basically do think after the 2 days I am free to try and get better paying job or a better my life?
Jhon says
Good morning sara
Today is the end of my DRO 12 months period
I know I free from all debt listed
I was wondering if I have to stick to 50 pound rules or do I have any restrictions?
Thank you
Sara (Debt Camel) says
There are no more restrictions on you at all. You no longer have to report income increases or getting a bonus, winning the lottery or inheriting anything.
Your credit record remains badly affected for another five years.
Jhon says
Hi sara
I have checked with the IS register And I am pls to say my DRO 12 months period is up .
I am very happy and relieved
I would like to take this opportunity to thank you from the bottom of my heart. You have been a great help so thank you again
naga says
hi
I had issues on lone my husband pay by DMP FOR 10 YEARS, DMP say now apply DRO, but I am sick , when I got issues 2010, 2011,2012 ….2018
I give advice for DMP, My husband ask them last year, then they agreed, but I don’t like DMP 10 YEARS my credit file is good, if I go DMP again
my credit fill will affect again 6 years, this is DMP COMPANY mistake. they will sort it out ?? please advice to me ?
thanks
naga
Sara (Debt Camel) says
I replied to your previous question about what to do here https://debtcamel.co.uk/prove-it/comment-page-2/#comment-330422
I don’t know if you would have qualified for a DRO before. I don’t know what you told the DMP company – you may have been expecting your situation to improve in which case a DRO previously would have been a bad idea. have you asked the DMP company why a DRO was not recommended before?
I think your credit record is not the most important thing here. You are unwell. A good credit record so you can borrow again seems less important than removing the stress of this debt.
Craig says
Hi I have 2 bank accounts one of them is in my overdraft limit and the other is 800 in credit. I was putting the money aside to pay rent as I am going in hospital for a kidney transplant. I went to the bank and the bank have frozen both my accounts. Will I get my money back or as it gone for hood
Sara (Debt Camel) says
Did your adviser not tell you to open a new bank account with someone you don’t owe any money to?
You won’t be allowed to keep an account with an overdraft.
I suggest you talk to your DRO adviser about your options.
Sarah H says
Does the “£50 test” include the repayments you are making on your debts? If I make all of my min repayments and pay my normal household bills I have about minus £185 a month, which obviously isn’t do-able so I am paying less than the minimum payments on a lot of them. However, if I didn’t make any debt repayments I’d have a lot more than £50 a month leftover. Does that mean I wouldn’t be eligible for a DRO?
Sara (Debt Camel) says
“Does the “£50 test” include the repayments you are making on your debts?”
No, it is assuming that you don’t make any debt repayments.
But you may be allowed more for your expenses that you are currently paying so it is possible you could then be under the £50.
Are you working?
Sarah H says
Yes I’m working and I earn quite good money. It’s my debt repayments that are the problem. Without them I’d have quite a good disposable income. I owe less than £20k but my repayments in total come to about £800 a month. Does that mean a DRO isn’t suitable for me?
Sara (Debt Camel) says
Talk to National debtline, they can look at whether a DMP or a DRO will be more suitable for you.
Julie Colquhoun says
Hi my dro had just been sent off after paying my £90.00. I bank with natwest i only have a basic account with them. Will they be informed and do i need to open a new bank account with someone else.
Sara (Debt Camel) says
They will be told if you owe any other debts to them or another bank in the same group, eg a credit card. Some banks also run regular chekcs on accounts holders so it’ possible this could show up later. If you want to be sure, you need to ask NatWest. I would be surprised if your account was closed but you may decide it’s a good idea to open a new basic bank account with another bank just in case. Wait until your DRO has been approved before you do this!
Paul says
Good evening. I have just had my DRO accepted on the 11/12/2019. My UC payment on the 15/12/2019 still had DWP deductions which were included on my DRO. Will the reduction be paid back to me?
On the same note, my DRO took a while to be accepted, due to me having several open applications for some reason. As such I have been paying back the repayments from my UC. Since I have included all my DWP debts on my DRO, will I be repaid the repayments I have made to the DWP?
Cheers. Paul
Sara (Debt Camel) says
Have you told UC that you now have a DRO?
The DWP deductions should be repaid to you. If they aren’t, then the debt adviser who set up your DRO will explain how to appeal this to the DWP.
I haven’t come across the issue you mention about your DRO being delayed, it sounds unusual. I doubt the previous deductions from your UC will be repaid, but discuss this with your DRO adviser.
Paul says
Thanks Sara. I have contacted the DWP and have been refunded. They did add that it was advisable to contact DWP payments and Debt Management (if you had debts thst were included in the DRO) to make them aware and avoid such underpayments. Just to advise as the DRO literature I had informed that all debtors would be nafe aware of your DRO.
I will also contact my DRO agent about the delay. I have kept all the emails regarding my application. I have asked by email previously that someone contact me to discuss but I just received emails asking me to contact them and when I did they were no more aware of the issue.
Thanks also for your quick response.
Cheers
Paul
Elizabeth says
Hi,
I recently got a DRO granted but lost my job 4 months after. I was looking into self employment but I remember that you have to have permission. Do I have to do this if it would my only income? How do I tell them about my employment ending?
Thank you
Liz
Sara (Debt Camel) says
You can’t be a director of a limited company in a DRO without getting permission from the court – is that what you are thinking of? I don’t think you have a problem if you want to be a self-trader, but the best people to talk to about this are Business Debtline https://www.businessdebtline.org/EW/pages/default.aspx – they are the experts on debt and the self-employed.
Elizabeth says
Thanks. I contacted my dro advisor. They said as a sole trader I am fine so long as my earnings stay in the bracket of no more than £50 spare per month. Which it won’t for a long time.
I can’t make my business a limited company which you are right about, that makes sense.
I can move forward with my life and new outlook.
Sara (Debt Camel) says
Good news – I hope the new business and 2020 go well for you.
Joseph says
I have been gra Ted a DRO but I made out I lived on my own and estranged but my wife lives with me and earns a full time salary plus child maintenance and family allowance. A creditor has told the or so what will happen now. Will they revoke my dro or ask for evidence. Can I still lie and hope they dont look into it.
Sara (Debt Camel) says
I don’t know what the OR will do in your case.
You should tell the full truth from now on. To lie would be criminal offence, not just a civil one, so potentially you could be prosecuted, get a criminal record and even be sent to prison. That’s very rare – not a risk for anyone who has accidentally left something off – but deliberately lie now and it’s a risk.
Elizabeth says
You actually didn’t need to lie as they wouldn’t have forced your wife to pay your debts. It’s just a check.
I would contact your debt advisor and speak with them. It may be that your expenses for the month would still have fallen into the correct bracket.
Your wife could even have done one for herself of she was struggling too
Tracy says
My ex husband did this when we were together. He kept trying to lie but it made it worst. The o.r started to investigate everything and he was prosecuted in the end. All he had to do was admit he had lied immediately and the o. R would have just revoked the DRO but cause he tried to keep lying it made it worst. The local furniture store reported him, not all creditors will report you but if they’re local and see you about they will.
Stacey says
Hi,
I spoke to StepChange today about entering into a DRO, originally I was applying for an IVA but after doing my budget I have under £50 spare a month and therefore have been advised a DRO is the better option for me,
I am waiting on paper work that I have to send back with my bank statements etc, they have advised it may take 8-10 week for the DRO to be set up and accepted from this point, is this normal? As my credit accounts have only placed a 30 day hold on my accounts and I am worrying about this
Sara (Debt Camel) says
Yes it’s normal. It feels like a long time, but it doesn’t really matter that it is longer than this 30 day hold. Nothing your creditors can do can be a problem at this stage unless you have notifications about bailiffs, where it is vital you do not let them in. If your debts are much earlier stage, then you miss a few payments, you will get some cross letters and texts. StepChange can talk to you about any you feel very stressed about.
Feri says
Hello!
I have debts of around £24,000 with all interest frozen. Haven’t paid a penny to any creditor since 2016 but have always maintained correspondence with all creditors.
I have no assets whatsoever. I was out of work for three years but I’m now working and earn around £22,000, and with all expenses and income considered I have around £150-£180 spare each month.. would that stop me from starting a DRO? And what alternatives are there for someone in my situation?
Many thanks
Sara (Debt Camel) says
If your debts are more than £24,000 that rules out a DRO.
One option for you would be a DMP, but at that rate of payments it would take a very long while. It could be a good option though if you expect your finances to improve?
If you expect them to get worse, it may be sensible to consider bankruptcy now. Talk to National Debtline on 0808 808 4000/
Feri says
Thank you, Sara. Appreciated.
I expect my finances and situation to improve, but I fear that I may be locked into paying back my debt for many, may years to come. I’m not averse to paying the debts, so I may consider full and final payments/settlements.
Thank you,
Feri
RJ says
I just had my DRO granted. One of the creditors wrote to me saying: we received info from Insolvency Services about your DRO so now we’ve written off the balance and closed your account. Does that mean they cannot claim on this debt in the future? Even if my DRO fails the 12months moratorium period? 🤔
Sara (Debt Camel) says
Sounds like it! But let’s hope your DRO goes through smoothly.
RJ says
Yes! I hope so too! Early days, only have had DRO since 29th January.
Thank you for a swift reply and may I thank you for this amazing website? Mainly because your knowledge and advice I was finally strong enough and wise enough to tackle my debts!
Very grateful :) thank you!
Stacey says
I have been advised not to put my DRO Application in if I have used any of my credit cards or catalogue accounts in the last 3 months, I used a credit card £30 on Christmas Eve, should I wait before I put in my application?
Also I have been told StepChange are sending me the payment letter next week how long from me lying my fee will my DRO application be put in? Thankyou
Sara (Debt Camel) says
StepChange are the best people to ask about this. Have you been sent a copy of your completed application form?
Stacey says
I am being sent it this week, have been told I will recieve by next Friday with the barcode letter to make payment if this is what you mean?
Jennie says
Hi
Does the official receiver look at your budget sheet? My auntie is severely depressed and goes to a counsellor once a week costing £25 per week. Would this be classed as excessive?
Sara (Debt Camel) says
Your auntie is thinking of a DRO? She needs to talk to a debt adviser. Is she in work or reliant on benefits?
Michelle says
Hi, I was with an energy company who went bump last January and I was automatically put with another energy company. I have paid all bills up to date, but they are now saying i owe £490 to previous energy company and threatening me with Debt Collectors. I have written complaint letters but they are ignoring them. I am 6 months into my dro. I dont know what to do. I dont even think I owe this money otherwise i would have included it in dro. Can they pursue this without evidence that i owe it? I have asked them for evidence but they ignore my letters/emails. They just keep sending me an overdue Bill. Can they even claim on behalf of another company? Stressing me out.
Sara (Debt Camel) says
I suggest you go to your local Citizens Advice for help with this.
Michelle Foster says
ok, thank you.
Bonita says
Hi does child maintenance classed as income when applying for a DRO.
Thanks
Bonita
Sara (Debt Camel) says
Yes it is.
Rachael Mackey says
Hi Sara,
Do you know if on a DRO and you have a car on hire purchase, Do you have to class the car additional debt or can I just keep paying the monthly as normal so that I can keep the car to commute to work. There are no missed payments but I don’t really want to stop paying them as this would then take me well over the £20,000
Also do you have to change bank accounts with a DRO or can you keep the same account if you don’t owe the bank any money?
Thanks in advance…all the post have been really helpful – was just unsure about the cars hire purchase agreement and whether it’s considered a deficit or if I have to make it a debt by defaulting or handing it back?
Thanks
Rachael
Sara (Debt Camel) says
A HP debt that is in arrears has to be included as a debt in a DRO application so it could take you over the 20k.
If you aren’t in arrears it gets complicated… not just because of what the Insolvency Service says does but because there may be a term in you HP contract which allows the finance company to terminate it if you become insolvent (bankrupt, IVA or a DRO). I suggest you talk to National Debtline on 0808 808 4000 about your full situation including the car finance.
Rachael Mackey says
Thanks Sara, I’ll check with them and dig out my paperwork too!
Thanks for getting back to me,
Rachael
Liz says
I was also told during my dro that if my car was worth over a certain amount I would have to sell it as its an asset that could be used to pay creditors. I can’t remember if it was £500 or £1000 it had to be under in value
Sara (Debt Camel) says
yes but that doesn’t apply to a HP car as it is owned by the finance company, not you.
Liz says
Ah they didn’t say this to us! That’s good to know thanks.
Luke says
Hello, if my DRO ends on the 20th of July, can I start a new, high paying job on the 1st of July, without it affecting my DRO? I think my first wage will be on the 1st of August.
Thanks
Sara (Debt Camel) says
Sounds OK but pretty close… talk to the debt adviser that set up your DRO as you don’t want to get this wrong by a few days.
jean says
hi im currently in contact with step change on behalf of my son and his debt .. they have suggested a dro his overall debt is around 8000 the question i want to ask is he is an agency worker and his income is inconsistent … hence the debt .. at the moment he is on universal credit will this inconsistency with his income affect the application or decision with the dro his work pattern changes all the time … how will that work if he has a dro.
Sara (Debt Camel) says
He really needs to talk to StepChange about this. Looking at how his income and UC have varied over the last 6 months can give an indication. StepChange won’t put his DRO forward if they don’t think it is suitable.
Stephanie says
I have just had a dro approved (14/2) but have now realised I dont qualify as I didnt state that I may have a share of a old cottage in Greece. My ex husband was supposed to transfer into my name as part of my divorce settlement but he has refused to do so as he cant afford it! I didnt include it as it is abroad but have since realised this was bad advice. I know I need to notify the Insolvency Adviser but am worried what they will do. Will I be prosecuted. I am also assuming the DRO will be revoked? My debts amount to £19k so will need to find another solution. I should add thst i suffer with mental health and have a chronic illness
Any advice will be appreciated. Thank you.
Sara (Debt Camel) says
“have since realised this was bad advice. “
who told you this?
Yes you do need to tell the Insolvency Service and your DRO is extremely likely to be revoked. In general, prosecution is less likely if someone explains promptly when an error has been made, but I cannot say what will happen in your case.
I suggest you talk to the debt adviser that set up your DRO about your other options.
Amy says
Hi I was wondering if my DRO is rejected how long before or even if can I apply again for one? Thankyou
Sara (Debt Camel) says
Why would your DRO be rejected? Are you in the process of making one?
Stacey says
Hi, I had my DRO accepted today, on the letter my water bill is included as a debt (I get a quarterly bill), my question is do I still pay my monthly water instalments? I dont want to fall behind with my household bills but also don’t want to put my DRO in jeopardy, Thankyou
Sara (Debt Camel) says
The best thing is to talk to the adviser who set up your DRO – it depends on whether arrears or the current bill was listed in your DRO. In general if a debt is included in your DRO you should not pay it. But future bills from the same firm are new debts. This can be confusing for utility bills and your adviser would rather talk to you to make sure you get it right.
Stacey says
Thankyou! I’ve phoned StepChange who advised as it’s not arrears and just a bill as such I should continue to make my monthly payments and it won’t effect my DRO Thankyou
Sara (Debt Camel) says
It’s good to know!
Emma says
Hi
My husband is in the process of applying for a dro, he has around £5000 debt. He has been told to included his car which is on hp in the dro as there is still £6000 owing.
If a family member were to purchase him a car for under £1000 within in the 12 months of the dro would that be ok?
Also if our bank statement doesn’t match entirely to our written budget eg ; we wrote down we spend £500 on food but on bank statement it’s less for that month, is that a problem ?
Thanks
Sara (Debt Camel) says
Hi Emma,
are you saying he he is going to hand back the car and the family member would buy him another one as a replacement?
Emma says
Hi Sara
Yes that’s correct we’d hand the car back and the remainder of the finance would go into the dro.
A family member has said they would purchase us a car under £1000 once the dro has been accepted.
Thanks
Emma
Sara (Debt Camel) says
I hope he has talked to the adviser setting up his DRO about the car going back?
He is allowed to own a car worth up to £1000 in a DRO. The kind family member can give him a car worth less than that. Or they could give you the car, then it wouldn’t matter what it was worth. Or they could keep legal ownership of the car and let him drive and insure it, then it wouldn’t matter what it was worth. His debt adviser will explain all these options to him. It really is best that the debt adviser knows everything about the case – I can only give generalities but it’s good to get it confirmed exactly what applies to him.
Emma says
Yes the advisor advised him to add the car to his dro as it’s value is over a £1000 so he said it could of been complicated.
Could I also ask what they generally check with the bank statement? As I said I was concerned if that particular month it didn’t match the expenditure budget I gave them.
Sara (Debt Camel) says
It’s up to the debt adviser what they want to check before submitting a DRO. The insolvency service doesn’t ask for bank statements to check the application.
Tom says
Hello
I have had a dro since June/July last year
I’m kinda scared cause completely my fault I just moved house and put my head in the sand
I have had a job at currys since September paying inbetween 800/1200 a month
But I have only just found out I had to declare it ASAP but obviously I’m 6 months in now I have just been trying to ignore the world I’m autistic so handling things aren’t my forte
I am just scared because I’m so far in I don’t know what to do ☹️
Sara (Debt Camel) says
Talk to the debt adviser that set your DRO up. A new job often doesn’t leave you a huge amount better off if you lose some benefits. Yes you should have done this earlier, but get right on it now!
Adt says
Hi,
Please I need some advice. I have been living with debts for some years ,now got worse and I ended up taking credit to pay another debt. I cannot live like this anymore as I have a 1 year old baby. The problem is that I had a guarantor loan and my mother in law gaved me money as gift to pay off this loan as she was the guarantor and I also buyed some items from my store catalogue, all this in the last 2 months. Forgot to mention that I live with my partner and he works and earn pretty good, but he also is the one that pays everything (rent, bills ,food etc.).
Looking for debt solutions I found DRO…
Can anyone give me advice, can I be refused DRO in the situation I am? Thanks.
Sara (Debt Camel) says
Here I am assuming you meet the normal DRO criteria. I think you should talk urgently to a debt adviser about this, you don’t want to proceed assuming you can get a DRO and then find later you can’t, so phone National Debtline on 0808 808 4000 for advice about this.
You MIL giving you the money to pay the guarantor loan should not be a problem for a DRO. You will have to explain what happened to the debt adviser that sets up your DRO, but this was not you CHOOSING to repay the guarantor loan rather than your other creditors the Money was only given to you for that purpose.
Re buying things from catalogues, you need to stop that now. And either stop making any any payments to your debts or just offer them all, no exceptions, a token £1 a month. If you do that for a couple of months you can then apply for a DRO.
BUT you may have one alternative… do you know how much interest you paid to the guarantor loan? That’s the total of all the payments you made including the final settlement less the amount you borrowed. And how much do all your current debts add up to?
Adt says
Hi, I qualify for DRO. The total of my debts is around £15k. I can’t afford to pay as I don’t work anymore ,but I don’t know how to stop paying and give them £1, I am scared. I always paid my debts on time ,never had a missed payment. What should I do, cancel my direct debits and call to tell them I’ll only pay £1? The things I bought from catalogue were already on a credit limit I had from long time, I havent applied for credit now…
Sara (Debt Camel) says
The £20k limit isn’t the only criteria for a DRO. I suggest you talk a debt adviser now to make sure you are going down the right path for you.
What should I do, cancel my direct debits and call to tell them I’ll only pay £1?
yes. Or email/message them. Or just cancel the DDS and when they contact you talk to them and offer £1 if you would find that easier. Say you will be taking debt advice.
Rushon says
Hi,
What checks for the insolvency service do during the 1 year momentary period.
Will they know if my income changes or I change jobs?
Sara (Debt Camel) says
You have a duty to inform the Official receiver if your income increases. It is a criminal offence not to. See What happens if you don’t tell the official receiver? in this article: https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/while-a-debt-relief-order-is-in-place/your-circumstances-have-changed-debt-relief-orders/.
Luke says
Hello,
Can I buy a second vehicle while on a DRO? It’s with the intention of selling the first one as its got problems in the engine. But I will own the two for a short time.
Sara (Debt Camel) says
Has your DRO started? How long ago? What do you think the current one is worth – anecdotally second hand car prices have collapsed in the last two weeks.
Mr Luke Jones says
Interesting.
My DRO started last September. The current vehicle is now worth little, say £300?
Sara (Debt Camel) says
well you are allowed a car worth up to £1000 and assets of up to £1000. So unless you had a lot of assets at the start, you may be OK – talk to the Debt Adviser who set up your DRO about this.
Emma says
How many months bank statements do you require for a DRO application. Last month I was paid two large amounts for back dated DLA and carers allowance claims will this stop me getting a DRO
My only income is UC, DLA and carers allowance I don’t work
Many thanks
Sara (Debt Camel) says
Getting these back dated lump sums by itself won’t affect getting a DRO. What matters is how much money you have in the bank and, if you have spent it, what you spent it on.
You can have up to a £1000 in the bank when you have a DRO. If you currently have more than that, then I would say top priority is to repay any rent arrears if you have any? Are there any essential items around the house that are needed – very old washing machine? New mattress? Kids need new shoes? Keep receipts for things.
Don’t start paying off a few debts (except for rent arrears) without checking with a debt adviser first as this may be “preference” and stop you getting a DRO.
Lauren says
Hello,
I’m currently a student nurse who is being called to provide help during the COVID 19 outbreak- this will be paid meaning that I am above the £50 a month allowed with my DRO. It ends at the end of July. Who do I need to inform of the changes to my circumstances and is it likely that my DRO will be revoked due to the increase in income? Although it’s through a pandemic.
Thank you.
Sara (Debt Camel) says
Hi Lauren,
First 👏👏👏 thanks for all you and your fellow student nurses are doing.
Can you say who set up your DRO – which debt advice agency, not the name of the adviser?
How large were the debts in your DRO?
Do you have any idea how much you will be earning in a month? And is this temporary or have your student days ended and you have graduated early?
Lauren says
Hi, thank you!
It will be continuing until I qualify in September but my debt relief order will be finished end of July.
The debts are around 14,000.
CAB set up the debt relief order.
I will be receiving over £1,000 a month.
Thank you for your reply.
Sara (Debt Camel) says
ok, so I think you should go back to the adviser who set up your DRO and ask for their help to contact the Official Receiver.
You may have some extra expenses because of working but it seems likely that you will be left with much more money thatn you expected.
The Official Receiver has in threory a lot of discretion about revoking a DRO. I would hope that given you are helping your country by doing this job – you didn’t just choose to do it for the money! – and because your DRO is so close to the end, the OR may decide it can be completed, not revoked.
Stacey says
Hi,
My DRO began in March, I set it up through StepChange as my spare money each month was £32,
With the COVID-19 my universal credit is going up next month by £1000 for the year (£83 a month) is this going to affect my DRO? Or would I be able able to change my whole budget etc as it’s going to be costing me more as my children are off school etc.. Thankyou very much :)
Sara (Debt Camel) says
The DRO unit has said you don’t need to inform them when your UC goes up :)
Do you get council tax support? if you do, contact your council as you should get an extra £150. You don’t have to tell the Insolvency service about that either .
Stacey says
Oh lovely! Weight off my shoulders Thankyou!
I do, I’m on full UC with 2 children, and get council tax support I haven’t seen anything about the council tax support going up, where would I find this info?
Thankyou so much for your help
Sara (Debt Camel) says
See https://www.rightsnet.org.uk/welfare-rights/news/item/government-issues-guidance-to-local-authorities-on-500-million-council-tax-hardship-fund and ask your local council about this.
Khan says
Hi Sara, it is great to see all the support you are providing on here. I am applying for a dro at the moment through step change. Me and my partner are on UC and as we had a advance, I have been told to include that in my total debts, but as the advance was taken in a joint name, I have been told that my partner will still have to continue paying off the full amount of advance as well. Im confused if the advance is going on my dro then surely she doesn’t need to continue paying the full amount as well, it’s like I’m paying for it and she is going to be paying for it as well. Any help will be appreciated. Thanks.
Sara (Debt Camel) says
I have been told to include that in my total debts
that is correct
as the advance was taken in a joint name, I have been told that my partner will still have to continue paying off the full amount of advance as well.
That is also correct.
it’s like I’m paying for it and she is going to be paying for it as well
That would be wrong, but you AREN’T paying it.
This is a joint debt and both of you are liable to pay the full amount.
If your partner also has a DRO, then neither of you will be paying it.