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’y going to be a problem – it would cost you far more to rent a room privately somewhere else!
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! Less than 1%. 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
Lindsay white says
I have played online bingo with my Christmas money a few times is this gonna cancel my dro
I also received a arrears letter from PayPal last week even though they know about my dro ? But when I look I line my name is still on the insolvency register ?
Many thanks
Sara (Debt Camel) says
“I have played online bingo with my Christmas money a few times is this gonna cancel my dro” No, you can spend your money on what you like, it isn’t checked up on.
“I also received a arrears letter from PayPal last week even though they know about my dro ?” You had a paypal debt in your DRO? If you did, then it’s fine for paypal to send you a letter saying you are in arrears. But it’s NOT fine if they are asking you to make a payments to them Are they?
Luca says
Hello,
I am about to apply for a DRO. Am I allowed to sign an “agreement to sell” agreement for a future purchase of a property that will take place some years after the DRO has finished? It’s for a future purchase, not now.
Thanks.
Sara (Debt Camel) says
That sounds unusual. I suggest you talk about the details of the future purchase with the debt adviser setting up your DRO.
Jack says
When you have been accepted for a DRO will the insolvency officer ask for bank statements during the moratorium period? It’s no issue obviously but I had a joint account, have taken my name off in anticipation of the DRO affecting the other account holders credit rating. I’m yet to set up in my name a basic account and transfer it all over so but may not bother unless this is something they want to see as it’s a lot to transfer.
Sara (Debt Camel) says
“will the insolvency officer ask for bank statements during the moratorium period” No.
“I had a joint account, have taken my name off in anticipation of the DRO affecting the other account holders credit rating.” Good move.
“I’m yet to set up in my name a basic account and transfer it all over so but may not bother unless this is something they want to see as it’s a lot to transfer.” sorry, what will you use for a bank account?
Jack says
Thanks for your reply.
I was opening a basic bank account for two reasons. One because the bank advised it may help in future on their decision to upgrade my bank account as opening a bank account in the long run may prove harder.
And two because I thought of I was investigated or asked to show bank accounts it may reflect on me if I’m operating out of someone else’s name. Basically all my house hold bills come out of this account. (I had to take my name off as the bank said they’d freeze it}
Jack says
I read conflicting info on the bank statements. My intemidiary says no too but some others who have been through it say the were asked at 6 months.
CB says
Hello
I am needing to open a new Basic Bank Account before a possible DRO is granted. However, I wondered if I can actually just do a switch from my current bank account to a new basic current account with a different bank ? Or, do I just need to open a new account and do all the setting up of Direct Debits etc and inform my Income organisations too ?
Thanks
Sara (Debt Camel) says
If your old bank and the new one are both subscribed to the Current Account Switch service (and most of them are) you can use that. Here is my article that may help you decide who to switch to: https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
James says
Hi there – prior to setting mine up I was with Barclays and I used HSBC switching service with no problems.
I didn’t have any debt with the bank account, but my Barclaycard was part of the DRO.
I had no issues, you just need to make your new bank aware that you are in the process of applying for a DRO
Hope this helps
CB says
Thanks Sara and James. I have read other advice that states best not to mention Dro as some banks could be less understanding!
Amy says
Hi.
I’m in the process of applying for a DRO.
I’ve recently read something that I wasn’t aware of, but not sure how true it is.
A lady told me short and sweet that she had a DRO.. and 2 years after it was completed she was meant to receive money via a PPI claim. Her comment was that she never received the money because it went to the debt she thought was paid off?
Can anyone shed some light on this please?
Sara (Debt Camel) says
This is what often happens if the debt was in the DRO.
For you, if you think you may be able to reclaim PPI and it could be a lot, do it now before you start the DRO. Because the deadline for starting a PPI reclaim is this August! So waiting and doing it afterwards is not a possibility even if the would come to you.
Emma says
Hi There, I was in a DRO in June 2013, I know you have to wait 6 years before you can apply for another, but is that 6 years from start 2013 or from discharge in 2014 any info would be great Thanks
Sara (Debt Camel) says
It’s six years from the start.
MARIE says
I have applied for a dro online and the application will be posted my wages were paid into my bank account however I have used the overdraft and therefore with wages paid in, it is still in the minus. I need to get by and pay bills, food, rent etc but I am using the overdraft which was my wages paid into the account. Will this affect my application?
Sara (Debt Camel) says
This won’t precvent your DRO being approved. Have you been advised to open a new bank account?
Karen says
I had my DRO application submitted by Step Change late afternoon 5 April and still have no update if it’s going to be approved. I telephoned Step Change and the said they had had nothing back either and to call back Tuesday after bank holiday. Do some applications take longer to review? I turn 55 next January and had to confirm I wouldn’t have access to two small pensions within the year of DRO. I checked with both dormant pension providers one said I had to be 57 and the other after my 56 birthday. Could it be they’re checking this out. StepChange were very confident I would be approved my anxiety levels are through the roof.
Sara (Debt Camel) says
I am sorry but I can’t say anything sensible about this. It is very unusual to not get a decision within a few days.
James says
Check the insolvency register
Karen says
Thanks. Thought it might have been their timescales have lengthened like ours at work due to the amount of people struggling Step Change said check Register and call them back Tuesday, that would be 10th working day.
Thinking they’ve decided to refuse it and now just waiting for refusal letter to see what will be the next step
Karen says
Just to update you just in case you have similar question in future. Spoke to SC Tuesday after the longest weekend. Having contacted IIS it was found my application and others hadn’t gone through on 5 April due to IIS systems being down for change over to new tax year. My application resent Tuesday as priority & successful next day so my twelve months have started from Wednesday.
Sara (Debt Camel) says
Phew! What a relief for you. Thanks for the update. I hope the rest of your DRO year passes peacefully.
John says
Hello,
I have a salaried job, but use my salary to fund a new business, so I am also self-employed. Am I able to apply for a DRO? My money left over each month is around £50 a month because of the expenses of my business, which includes employing a worker.
Thanks.
Sara (Debt Camel) says
I suggest you talk to Business Debtline on https://www.businessdebtline.org/.
Luke says
Hello,
Is it true that you must include a student grant in a DRO if there’s a risk that you are not going to be able to finish the course thereby generating an overpayment?
Sara (Debt Camel) says
I don’t know what sort of student grant this is that would result in an “overpayment”. But in general you can’t include a debt in a DRO unless you are actually liable for it right now, not may become liable at some time in the future. I suggest you talk to National Debtline on 0808 808 4000 about this and your options.
Luke says
Because I’m in such a financial mess, I’m worried I wont be able to finish the course, and then an overpayment will be generated, creating a new debt. I could either try to struggle on with the course, or end it quickly so that the overpayment is generated now so I can include it in the DRO. I dont want to end it, but I’m worried that my poor performance may seem like I’m not doing the course well (it’s online) and I may get penalised.
Luke says
It’s a maintenance grant for a university degree, from student finance.
Sara (Debt Camel) says
I suggest you talk to National Debtline on 0808 808 4000 and ask if they think an “overpayment” may be generated. I haven’t come across anyone being asked to repay one, but they see more cases than me! They can also help you look at what your options are.
Luke says
Hello,
I’m also a director of a dormant limited company. Is there any way I can resign as director for the DRO but remain as the owner, or shareholder of the company and allow it to continue existing? There is no one else connected to the company.
Sara (Debt Camel) says
Does the company have any assets – in otherwords, are the shares worth anything? If the answer is no, why do you care about this company? If the answer is yes, then the value of the shareholding has to be taken into account in your DRO application.
Luke says
It doesnt have any assets, no. I just want to keep it because I like the name and will want to use it in future years. The value of the share is £1.
Am I able to resign as director but keep the company alive? Do Companies House allow that?
Sara (Debt Camel) says
Ask Business Debtline https://www.businessdebtline.org/ – they will know what your options are.
Robert Brunton says
Just a quick question, when they are making the assessment that say you are left with £50 a month after rent, bills etc are taken out is overdraft taken into account? I am currently in my overdraft and have access to more than £50 a month but this would all be more “debt” of getting me deeper into my overdraft. i.e no money that is actually mine just overdraft.
Would I be eligible? Sorry if I’m unclear, I can clarify.
Sara (Debt Camel) says
Your overdraft will be a debt that is included in your DRO. You will need to open a new bank account without an overdraft facility, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/.
KAtie says
I am in serious debt (£15,000) and I am desperate to sort it out. I have a baby on the way (due July) and will also be moving in with my partner the same month. Can I still get a DRo? I am currently working but will be receiving maternity allowance and child benefit for my three daughters from July onwards.
Sara (Debt Camel) says
If you are currently working, it will depend what your current income & expenditure looks like. You can’t apply now because you KNOW your income will fall. But if you won’t pass the disposable income rules now but will when you stop work, you can get the application ready to go as soon as that happens. So talk to a DRO adviser now.
Kelsey says
Hi there, I have a guarantor loan and the guarantor is my father. He is currently in a debt management plan. If I enter a DRO he is now liable, what will happen to him because I know he can’t afford the payments?
Sara (Debt Camel) says
Does your father own a house with equity?
Was he in a DMP at the time your guarantor loan started?
Sara (Debt Camel) says
I asked those questions because your father may have a very good case to be removed as guarantor, See https://debtcamel.co.uk/amigo-complaints-by-guarantor/ for how he can complain about this.
You could also look at complaining yourself that you should not have been given the loan as you couldn’t manage the payments, see https://debtcamel.co.uk/how-to-complain-guarantor-loan/.
But the answer to your questions is that if you enter a DRO, then the guarantor lender will chase your father for the money.
Dean says
Hi I have debts and get sent letters but moved address but want to put a stop to this I’m on universal credit and can’t afford to pay these is it worth getting a dro and how can i find out all my debts?
Sara (Debt Camel) says
Talk to National Debtline on 0808 808 4000 about a DRO – if you qualify, whether you have any other options.
If you get copies of your credit reports from all three credit reference agencies (see https://debtcamel.co.uk/best-way-to-check-credit-score/) they should show most or all of your consumer debts. After that it’s a question of how often you have moved and how likely yiu are to have council tax arrears, utilitipy bills owing from previous addresses.
Wendy says
Hi,bit confused with the rent errors and applying for a debt relief order.My main debt is with a housing association, but if they can evict me for clearing the debt with a dro,then its not really worth getting one is it.
Sara (Debt Camel) says
I suggest you go to your local Citizens Advice – they may know what the policy is of your local housing association and can look in detail at your options.
Kelly says
Hi, I’m about to apply for a DRO. My son is currently my dependant but he leaves home and starts uni this year. Obviously then money for him on my expenditure form would technically go down but I do want to keep supporting him financially while he studies, would this be considered reasonable? He’s 19. I’m worried the change might cancel the DRO. Thanks.
Sara (Debt Camel) says
But you will also be losing child benefit and child tax credit? You should talk to the debt adviser setting up your DRO about this change.
Kelly says
Thanks for the reply. Yes that’s right, but my income will increase to adjust for that as I will be taking on more hours at work. So my income should be roughly the same. My question is whether supporting a student is an acceptable outgoing. Thanks.
Sara (Debt Camel) says
That will depend on the details of your case, eg whether the student is living at home. You need to talk to your debt adviser about this. Often if you qualify for a DRO a student would get a full maintenance grant and i think this assessment is based on the previous year’s earnings.
Sam says
Hi Sara
I have my DRO approved
Now I need to pay for my son moped insurance monthly they told me is going to as a loan for 600 pound
Is this effect my dro.
Thank you
Kate says
Hi Sara,
I’m in the process of deciding whether a DRO is for me and I’m a bit worried about being rejected. StepChange have told me I’m the perfect candidate but I’ve just realised that I have paid two creditors their minimum payment and not the other four creditors (one for a month and one for two months) within the last two years, is this a huge issue or is it something they will be lenient about? I paid them this well over a year ago, will be two years in Feb.
Sara (Debt Camel) says
Tell StepChange but that sounds like a tiny point that is too long ago to be of any significance.
Stephen says
Hi,
Can they take assests like your PC and TV? I’m a musician by profession so would they include my mini studio as assests? These were bought way before the debt.
Thanks
Sara (Debt Camel) says
Nothing is ever taken in a DRO, but if your “assets” are worth more than £1000 then you can’t have a DRO. What matters is the second-hand value of assets – and a PC and TV are normally worth very little. If you are self-employed with business assets, I suggest you talk to Business Debtline https://www.businessdebtline.org/
Kate says
Hello Sara,
Thanks for your website.
I have a question after seeing Citizens Advice helper today – I am applying for a dro, but have no income at all at present. After traumatic crime incident last year, I have been trying to find work and new home (it was destroyed in raid), failing, and now live at parents. I have to pay storage costs for belongings of £115.20 /4 weekly, car insurance, some petrol some hormone supplements. Other expenses are being met by my parents. Have ptsd symptoms, homoeopath treating me. Cant face any NHS/universal credit interactions at all, very anxious etc.
Debt is £13,650 2 overdrafts and credit card the main one.
Can you say what my chance of a dro might be?
Thanks kate
Sara (Debt Camel) says
With no income, how are you paying the storage costs and other costs?
How much is your car worth and who owns it?
Kate says
The car is worth £430 according to Parkers valuation, hyundai getz 14 years old, in my name.
I am paying storage costs with overdraft and remaining credit till now. Next payment due 2 august which i will pay from cash from my parents. They dont know extent of my problems. They have said they will give me enough to cover future storage and supplements, weekly cash. Although this cant be noted as income I believe. I think I could ask them to pay the storage place directly, and then my own expenses would be car insurance and supplements of £60 pcm ?
I have £250 overdraft available and £600 credit card credit, but nationwide have sent me a general letter saying ‘persistent debt’ policy will cahnge on 8 August so I expect they will then demand repayments etc.
Really coming to the end of my road.
Thanks for replying, kate
Sara (Debt Camel) says
So where will you get the money for the car insurance (and road tax, MOT, petrol etc)?
My point here is not that you will be refused a DRO but that your debts are not your main problem at the moment – you need an income. If you are unfit to work, you can claim UC – it may seem stressful but getting an income will relieve other sorts of stress.
And you may well need an alternative place to live in the future. If that is going to be soon, it is best sorted out now, before you have a DRO on your credit record. if it is going to be years, it is questioanble if it is worth paying storeage for that long.
“the end of my road” may be the end of being able to borrow, but that doesn’t mean insolvency immediately is sensible.
Kate says
Dear Sara, thank you for your response, which has made me think again! I had given up trying for work after six months but will try again as I am sure you are right about income being the issue. I still have a few weeks leeway, although Nationwide have sent me a ‘persistent debt’ letter about changes they can make to my credit card agreement from 8 August, namely, suspending the account, charging more, demanding repayments etc. So I must find work before then I feel.
So thank you very much Sara, for your thoughts. K
Sara (Debt Camel) says
Good luck with everything going forward.
Please try to separate in your mind applying for benefit and finding work from the decision about what to do about your debts.
You can apply for a DRO now. Or in a few months. Once you have a job and a new place live, a DRO may be a very good idea.
The one point where a DRO would not be a good idea is if you are still living with your parents and get a new job – then your DRO would probably fail.
Or you could look at a Debt Management Plan when you have a job and can offer reasonable payments to your debts.
For now you can start making token £1 payments to Nationwide and any other debts now while you try to find work. Or you can simply tell Nationwide that you can’t make any payments now as you have no income. This August deadline means nothing in practice.
Paul says
Hi, I’m considering getting a DRO and have a couple of questions, First, I’m currently saving money for a relative (it’s their money but they don’t trust themselves not to touch it so i’m holding it for them) will this affect my ability to get a DRO?
Second: I have a Monzo Account which I will use as my regular bank account should my dro go through (Step change recommended a dro)
Third: should the answer to my first question be yes, if I have the money in my monzo account will it be safe there or would I have to give it back before I apply?
Thanks for reading!
Sara (Debt Camel) says
“will this affect my ability to get a DRO?” how much money is it? and how much do you have of your own money – is that all mixed in the same account?
paul says
It’s in my ISA its £8k, I have no savings of my own, I’m usually living in my overdraft in my main bank account.
I can always give it back should I apply for the DRO if it’ll affect it but he don’t trust himself with it, that’s why I wondered if it’d be separate in my Monzo account
Sara (Debt Camel) says
can you prove this came from him?
Paul says
Yes via bank transfers although they’ve been coming in over a relatively long period of time, I’m assuming I just ask the bank for old statements
Michelle says
Hi. Question pls.
I am looking to do a dro over the next few weeks… but i have recently had a pay day loan interest refund one off of just under 1.200, will this affect my order if i dont pay of debt with this money, as i have been spending on essentials for example contact lenses ( 1 year out of date) clothing for me anf my children , and my animals food etc basic needs
Also i am looking to go back to college to complete a accountancy course, it looks like this career choice wont be a option , is this correct.
Many thank
Michelle
Laura says
Hi,
I’m in the process of applying for a DRO, my partner and I rent a house off my parents and pay rent each month, we share it half each. Does the person dealing with the DRO ask to see rental agreements? as we don’t have one but it takes a large chunk of my part time wages.
Sara (Debt Camel) says
It’s up to the person setting up the DRO what they want as verification, but the money coming out of your bank statements may be enough. It’s normal to divide up the household bills roughly according to your incomes. So if your partner earns a lot more than you, they would pay more of the bills, but again talk to your adviser about this.
Jess says
Can I be a guarantor for tenant of rented property if I have a DRO
Sara (Debt Camel) says
Are you already the guarantor? or are you thinking about what may happen in the future?
Jess says
I’m currently a guarantor for my daughter but I’ve been asked to be a guarantor for her on a different property as she’s wanrinfnron move house. I’ve been her guarantor for 6 years but took out dro 2 years ago
Laura says
Hi I’ve just been approved for a DRO but can’t find anything about gambling. If I were to place the odd football bet or play the lottery and won what do I do? Inform the OR? Or would it depend on how much I’d won?
Sara (Debt Camel) says
You have to notify the OR of any money you win. Realistically I don’t think they will care if it’s £25 but if you win more than £1000 in total during the year your DRO may be cancelled.
A. says
Hi
My DRO was approved 8 months ago
I apply for universal credit I think I may be getting more than 50pound left each month
If my DRO get canceled can I apply for a bankruptcy
Please help
A
Sara (Debt Camel) says
If your DRO is cancelled you can go bankrupt. But that sounds highly unlikely to me! Talk to the adviser that set your DRO up.
Luke says
Hello,
If I have not been able to pay the rent, and the rent arrears are included in the DRO, can the landlord withold the deposit? My deposit is in the protection scheme.
Sara (Debt Camel) says
You need to talk to the adviser setting up your DRO, not just about this specific question but about where you will be living after your tenancy ends if that is during the DRO.
Shelter are also good people to talk to about this: https://england.shelter.org.uk/get_help
Sylvia says
I am about to make a DRO application. There are a few things that I am not sure about. Recently we were awarded DLA for my autistic son and Carers allowance. Our child tax credit was increased as a result too. Is this disregarded completely?
There is another thing as well. We may be getting a lump sum from our council in the near future for the way they were dealing with his education. We don`t know anything as yet, the Ombudsman might not investigate it, but if yes the amount could vary from a few hundred to a few thousands of pounds. Is this sum disregarded if You have a DRO? Or else could serve as a barring from getting a DRO?
Sara (Debt Camel) says
“I am about to make a DRO application. ” do you mean the DRO application is already to go, you just need to pay the fee? Or that you are about to start talking to a debt adviser about a DRO?
Sylvia says
At the moment I just need to talk to a debt advisor about DRO as our circumstances differ a lot from other applications. The lump sum ( if we receive any) would be a remedy through the Ombudsman.
Sara (Debt Camel) says
Good idea. You could go to your local Citizens Advice or phone National Debtline on 0808 808 4000
Kerry Smith says
Hi, I have had my DRO accepted which is great news. I do have an overdraft but it was not included in the DRO as I was not in it at the time and had only just swapped banks. Am i allowed to use it now? It is only £250 overdraft so do I have to tell the bank about the DRO? It says I am allowed credit up to £500 without having to tell the creditor.
Sara (Debt Camel) says
Do yourself a big favour and get an account without an overdraft! you have just got rid of all your debts. Why would you want to start paying the very high charges on overdrafts again?
Did your adviser know you had a bank account with an overdraft facility you were not using?
Angela wrightham says
Does anybody know how long it takes for it to be granted my application was submitted on Monday 12th of August I know it only few days .but thought would be quick I’m panicking a bit .
Sara (Debt Camel) says
See How long does it take to approve a DRO? in the above article. I suggest you give your adviser a ring.
Angela wrightham says
I paid my fee at a payzone at my corner shop I paid by card and not cash I looked this up and citizen advice have on there site that you must pay by cash .I’m worried now that they will not recieve the money I used the barcode and got a receipt. Will this be problem of them receiving the fee
Sara (Debt Camel) says
Have you told your debt adviser that you have paid the fee? If you haven’t, they may not have submitted the DRO.
Jhon says
Hi Sara
I have applied for an advance payment from universal credit of £750.free interest due to my rent arrears and other bill arrears
Will this affect my DRO.as my DRO
has been approved 6 months ago.
Thank you
Sara (Debt Camel) says
No it won’t.
Jhon says
Thank you Sara
So is no need to inform the insolvency services.
Pls put my mind to rest
Is much appreciated
Sara (Debt Camel) says
No, this isn’t a loan, it’s just an advance payment. If you inform them, they will tell you this – you may find that is best for your peace of mind!
Jhon says
Good morning sara
Thank you for your supports
Is very much appreciated
Karen says
I have debts of around £14,000 which have accumulated over the last ten years or so. Basically I have been using credit for every day expenses. My husband is self employed and there have been times where he has been out of work and we’ve been really struggling. I work part time (30 hours a week) and have 3 teenagers. I feel embarrassed about the mess I’m in and have buried my head in the sand for a long time. I just need to sort something out but not sure where to start.
Sara (Debt Camel) says
hi Karen,
I suggest you talk to National Debtline on 0808 808 4000. That’s a lot of debt so a DRO may be right but they can help you look at all the options and decide. then they can set up a DRO if that is right.
If your husband also has debts, he might like to talk to their self-employed service – Business Debtline on 0800 197 6026.
Rosa says
Hi Sara I’m hoping to apply for a DRO for about £12k of debt but I work in finance sector and owe some of that money to my employer on a charge card. I prefer not to tell work about my situation. I was thinking of paying off this charge card but then understand I can’t show a preference to my creditors so I’d also have to make the minimum payment on all my other credit cards?
Otherwise the option is not paying any more payments to anyone including the work charge card and I understand then my employer would be notified about this. I know it’s my own risk and could affect my job but I still feel the DRO is my best route. Also can the charity refuse to submit my DRO if I haven’t spoken to my employer because they asked if I had told them about it because I owe them money? And I said no not yet.
Sara (Debt Camel) says
is this charge card for work related expenses?
Rosa says
No it’s a personal charge card not related to my work expenses but from the same financial provider that I work for. It has a balance of £600 owing. The card should normally be paid in full each month unlike a credit card where you can just pay min balance. I could pay this off at a push this month but do not want to do anything to jeopardise potential dro
Sara (Debt Camel) says
I’m sorry it’s hard for me to say anything – I can’t imagine how you could possibly pay off £600 this month without borrowing any more somewhere else, which you should not do. If you pay it in full now, your DRO adviser may refuse to submit the DRO as it’s a preference. If you don’t pay it at all and go for the DRO, your adviser is worried your job could be affected.
Could you ask your employer if you could pay it off over say 6 months and during that time make the minimum payments to your other debts? And not use the charge card anu more obviously! As the article above suggests, the DRO unit will asses how serious any preference problem is.
Rosa says
Hi Sara thanks for getting back to me. I would be paying the £600 with my last full pay cheque before my money drops to the statutory maternity pay next month which is why I need to file for the DRO because I cannot afford all my debt repayments any longer while on mat leave. One advisor said it might not be a preference because the min contract repayment of the charge card is to pay the full balance each month.
Great website thank you
Michelle says
Hi Sara, I have recently started a DRO and I am currently on benefits, including sick. I anticipate being able to work soon and need some advice please on how this will affect the DRO. I am thinking I should be ok if I dont earn more than the benefits I get, because my disposable income will be the same or less even with extra expenditure of fuel etc. Do I need to notify anyone? Thank u
Emma says
Im currently thinking of applying for a DRO. I am a single parent, working part time, and live at home with my parents as i cant afford to move out. I have 2 loans, a credit card and a store card, but my parents also took out 2 loans in their name for me, which i pay monthly.. i know the 2 loans my parents have wont be included in the DRO, but would this be taken into account for my expenditure, as obviously i have to pay them each month
Sara (Debt Camel) says
No. You don’t owe this money, your parents do.
Are you paying your parents rent? because that would be allowed, if it was reasonable. So your parents could then choose to use the rent you are paying to repay the thier loans.
Emma says
Yes i pay 100 a month rent, both loans add up to 640 a month, i dont think it would be classed as reasonable if i said i paid 640 a month to them as rent. And without that 640 being included in my expenditure, it would seem i have a lot more disposable income than i actually have.. if that makes sense
Sara (Debt Camel) says
How long until the loans end? Why did you need them – they sound large loans?
Lorna says
Hi Sarah
My daughter has been advised by her debt adviser to apply for a DRO. She has debts of about £6,000 £1,400 of which are to the housing association. She has been paying the arrears off at £30 a month however the housing association do have an order of possession which will not be invoked unless she stops the payment which I assume would happen if she went for a DRO. I am in a position to pay the arrears off for her before the DRO is applied for in order to secure her home. This would leave the other debts to be covered by the DRO would you advise me to do this?
Sara (Debt Camel) says
Normally if there is a possession order, she will be allowed to carry on making the payments to it after the DRO. She should talk to her debt adviser about this and what is likely to happen in her case.
But your offer to pay the arrears is very kind and could make it a lot less stressful for her. It doesn’t matter that you are only paying 1 of her debts, that’s your choice and she would still be able to get the DRO.
So I think she she should talk to her debt advisor.
James says
i’ve been discharged from my bankruptcy for about 5 years and my local CAB said i didn’t qualify for a DRO as I fell out of work and got into more debt. is this correct?
Sara (Debt Camel) says
There may be other reasons why you don’t qualify for a DRO but having been recently bankrupt is not one of them! Can I suggest you talk about your situation to National Debtline on 0808 808 4000.
Michelle says
Hi Sara, I am in a DRO and looking for a job. Will I be able to work for the NHS in a secretarial capacity? I dont want to go through the whole process to be told at the end that I cant be employed because of DRO.
Thank you.
Sara (Debt Camel) says
Having a DRO is hardly ever a problem for employment – I would not expect you to be asked about your Finances or be credit checked before get a job as secretary in the NHS.
If you get a job though you will have to tell the DRO unit who will consider if you still meet the DRO conditions. It may be that you will, as your current beneficial reduce when you get a job. And you may pick up other expenses eg travel to work and childcare costs? But talk to the adviser who set up your DRO before accepting the job as you don’t want your DRO to be cancelled.
Jhon says
Hi Sara
My DRO has 3 months to end.
My budget is -£330.
I have applied for universal credit What I am receiving I am still under 50 pounds left
Do I have to inform my advisor as I am not exceeding the 50 pounds
limits
Thank you
Sara (Debt Camel) says
You have to inform the DRO Unit that your income has increased. It doesn’t sound as though this will be a problem for your DRO, but if you talk to your debt adviser first they will confirm this.
Jhon says
Hi Sara
sorry I didn’t understand
Is going to be a problem for me?
Also, can I apply for bankruptcy if my DRO revoked
Thanks again
Sara (Debt Camel) says
You should always tell the DRO unit if your income has increased, even if you don’t think this will be a problem for your DRO.
From what you have said, I don’t think getting Universal Credit will be a problem for your DRO, but if you talk to your debt advicer they know all the facts of the case and will be able to reassure you.
Yes if your DRO is revoked you can apply for bankruptcy. I think that is unlikely!
Jhon says
Hi Sara
I have sent my new budget to insolvency services via email. if shows I am £200 in the red so it should be okay, Stepchange did my new up to date budget
How long it takes to acknowledge and respond to confirm all good and my DRO active
I have taken £750 loan form DWP free interest will this effect me?
Also to revoke a DRO do they need to take to court?
Thank you very much for all your help
Sara (Debt Camel) says
The advance on Universal credit does not count as a “loan”, this will not be a problem.
No they don’t need to go to court to revoke a DRO but from what you have said this isn’t going to be a problem for you. StepChange would have warned you if it was.
Ian says
I am facing having to apply for a DRO but want to avoid my wife getting caught up in any negative credit record action. My main concern is that we have two joint debit card accounts in overdraft and I understand that, even though I put the total of these (£4K) in my list of debts for the DRO and these accounts are frozen, the bank can still seek repayment of the total £4K from her under joint and several liability. This would lead to further monetary calls on our meagre funds and cause her good name to take a hit in the process
If that is correct, would she be allowed to accept limited financial help from a relative just to clear that joint debt and close those accounts – leaving me to deal solely with my own debts of £15K – without raising problematic questions for me about ‘other funding sources’ or preferential creditor action? I hasten to add that there are no other financial resources that I can call on; we are both on state pensions and working to a very tight budget.
Sara (Debt Camel) says
With a joint overdraft the bank will expect your wife to pay the debt. And as it’s a joint account her credit rating will be harmed.
Yes a relative can settle the debt and then you can close the accounts. This isn’t “preference” because it’s being done by someone else, not by you and so it won’t stop you getting a DRO.
Do have a think about any other joint debts though. Council tax, utilities etc. Are you listing any of those in your DRO? And does your wife have any debts of her own? A DRO for her may be a better option and save your nice relative the money.
Ian says
As my debts are on my own credit/store cards and she has no debts in her own name, clearing the joint overdrafts is the main issue for her to deal with before I apply for a DRO.
Thank you so much for the information in your reply – that is a large weight off my mind (and my wife’s!)
Sara (Debt Camel) says
ok, Good luck with all this.
Connor says
Hi Sara.
I was just wondering if you could help me please. I am starting as a student next week and staying at work part time (for needed income) as I have to commute numerous times a week to my home town to see my son. I will be paying a rent for my property and board payments to mother when home to see my child. With this and the travel expenses, could this be something they would pull apart in my budget?
I am just becoming very anxious now, as I have received a court summons and would like to get this added to my plan as soon as possible. In regards to the DRO would I have to wait any longer to apply due to my income dropping within the next week?
Many Thanks.
Sara (Debt Camel) says
Court summons – what is this for?
It takes several weeks to apply for a DRO. I suggest you talk to a debt adviser ASAP about your situation. It may not yet be completely stable but you may know enough to be able to start the application process off.
Leanne says
Hi I have just applied for a dro in the 18th on average how long did anyone who has had one approved wait until they got a desicion?
Michelle says
Mine was 7 working days.
Zoo says
I have a active DRO , if u get a upgraded phone contract will it effect it ?? Thanks
I am currently in one now but due an upgrade but don’t want my dro to be cancelled because of it
Sara (Debt Camel) says
Part of the cost of a new contract is usually borrowing to repay the cost of the handset. The rest is an airtime contract for your usage. In a DRO you can’t borrow more than £500 without telling the lender that you are in a DRO. If you aren’t sure how this will affect you, talk to the adviser who set up your DRO about what you have been offered.
BUT consider refusing the upgrade and getting a cheap sim-only contract for a year or two. Could save you a lot of money! A lot of people do this, only getting a new phone every four years rather than every two.
Jhon says
Good morning Sara
I have 10 weeks to go for my DRO 12 month to finish
I want to sell my car which I most likely to get £750 for it so I can buy a different one for about some money
Do you think this will cause any issues to affect my DRO
I have to be honest I have 10 weeks to go and I am very very anxious and stressed
Pls, help me.
Sara (Debt Camel) says
If you are buying a car for the same amount, I don’t think that’s going to be a problem. If you are very worried, talk to the adviser who set up your DRO – they are the expert on all the details of your case.