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’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!
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
Alex says
Hi, I a 24 year old male and I am in receipt of PIP and ESA due to having very complex disability needs and as such suffer from severe depression and anxiety. I have never worked and will never work. I have no assets of any value and currently live with my older sister since losing our Mum, in a council rented property, none of the household bills are in my name although I do give her half towards everything (rent/council tax/utilities) for my keep and board.
I have found myself in £16,700 of credit card debt (and one small loan) but due to very large interest rates, always increasing the limits and only paying minimums I cannot afford to carry on this way. I completed a debt remedy form on stepchange however it is showing that after bills I have more than the £50 surplus income however can PIP/DLA be included in income as isn’t it what is needed for my care therefore my bills should just be deducted from my ESA which would take me way below the threshold as I have been using all of my benefit money just paying the minimum payments and feel like I am sinking.
Many thanks in advance
Sara (Debt Camel) says
I suggest you discuss this with StepChange. What needs to be done is to put the costs associated with your disability in as expenses.
david says
quick question, what are my options if i am considering a DRO (have unsecured debts around £18k) but i have recently had to purchase a used car on HP?
Hajnalka Hernadi says
Hello,
I have been granted DRO in May. When I look at my credit report I don’t see the default which should be put on already by my creditors. Is that possible? Where should it be noted ( maybe I am looking at the wrong place?).
Many thanks for your answer.
Sara (Debt Camel) says
It’s possible that defaults have been added in the last few weeks but don’t show up yet. Lenders only update the credit reference agencies once a month. And if you are looking at a free report, that is also a snapshot only taken every 30 days.
This isn’t really anything to worry about at the moment, just wait until your DRO has finished, then a few months afterwards you can start the post-DRO clean up, see https://debtcamel.co.uk/repair-credit-record-dro/. If you do this now for the default dates, you may have to domuch of it again in a year to get the balances corrrected to zero. It’s easier for a DRO to do them all at once.
Bob says
I am in the 12 mounths of a dro and I had a studio cateloge not listed as I didn’t owe any money. Do you know if I order of this cateloge now can my dro be withdrawn.
Sara (Debt Camel) says
This would be a very foolish thing to do. You are in the process of getting rid of all your debt, why start to get more expensive debt? Studio charges high interest and their “Buy Now Pay Later” deals have the evil clause which means if you don’t pay it all off by the end, you are hit with backdated interest back to when you bought it.
Sam says
How do the insolvency service check the debts on the DRO? I have checked my credit score/report on all major credit reference agencies however I want to make sure I haven’t missed something which may lead to my DRO being rejected.
Sara (Debt Camel) says
They look at your credit reports :)
But thing about debts that don’t show on your credit report, see https://debtcamel.co.uk/debt-not-on-my-credit-file/ which lists some of these. If they are not included in yourDRO! They are not written off by it and may come back to trouble you, so it’s well worth the effort to try to list all of them!
M says
Hi
I meet the criteria for a DRO other than my car is in my name despite it being owned and paid for by my mum (and worth approx 2k).
After reading your advice on here regarding it being allowed to be processed in this situation, Stepchange have said that this is definitely not the case, after speaking with their DRO team.
Would you have any other solutions at all please?
Many thanks
Sara (Debt Camel) says
That is surprising. If your mum bought the car and can prove this, then she is the legal owner even if you are the registered keeper. I suggest you talk to National Debtline and see if they take the same view.
M says
Thank you Sara. I will do that. I only have a receipt which says sold as seen, in her name. Any idea if that would be sufficient?
Thanks for your time.
Sara (Debt Camel) says
Ask National Debtline what they need to see.
M says
Hi. I checked with them today and it was the same answer. So in a bit of a tricky situation now. Frustrating really. Thank you anyway
Sara (Debt Camel) says
Was the problem producing proof about who bought the car? What did National Debtline suggest you do?
Keith says
A registration document is NOT proof of ownership as it only records details of the registered keeper.The people at Stepchange should know this.This is a legal document and they can’t change it to suit themselves.This was originally done to stop people buying vehicles on HP and then selling them.
Jodie says
Hi,
How long does a DRO stay on your file for?
Thanks
Sara (Debt Camel) says
It stays on your credit record for 6 years. After one year, when your debts are written off, you can start the process of “repairing” your credit record, see https://debtcamel.co.uk/repair-credit-record-dro/.
Keith says
Hi, I posted about a month ago (the man who is deaf & is a carer)
I’ve just found out that my DRO has been accepted & have received a letter confirming this too.
My question is that I keep getting told by people that I will be checked on by the Official Receiver during the moratorium period & keep on comparing it to bankruptcy?
Being profoundly deaf & having other health issues I find dealing with unfamiliar situations & people extremely difficult.
Is this the case & if so have others been contacted?
K.
Sara (Debt Camel) says
I don’t know who is telling you this but (a) most people going bankrupt have no contact with the OR after the first few weeks and (b) on a DRO you will very probably have none at all.
If you get over £500 (inheritance? back tax?) or if your income goes up you have to inform the OR. But you are not checked up on.
K says
Hi, thank yo for clearing that up for me.
Not getting any money coming to me, was just concerned thats all!
If I do win the lottery (if!) I’ll be sure to let them know!
Thanks again,
K.
Sophie says
Hi,
I am going to apply for DRO. I got myslef in debt over last 4 years for different reasons. Some of them were paying car insurace, some of them were just general spending on clothes etc. Like I said- it has built up over the years. Is any of that checked when you apply? Will I be asked how did I spend my money? I am worried because I might not be able to mention all of the things I have spent money on in those years.
Also, at the moment I have my car insurance paid till November, but since then I will want to pay in installments. Would it be better to apply for DRO then or apply now anyway?
Another thing I want to ask is – I am going to college soon, but my BF is going to pay for me, will that affect my application for DRO? He is willing to pay for me because he worries about me and wants me to have a proper career.
Many thanks!
Sara (Debt Camel) says
No asks you what you have spent the money on.
Car insurance – will you need a car if you are a student? how much is it worth? If you are going to college next month, things are going to change quite a bit in your life. It might be better to wait a month or two until you know what your expenses will be before applying for a DRO. But you could talk to an adviser who sets up DROs now, just so you feel comfortable about that you are hoping to do – see https://www.nationaldebtline.org/EW/factsheets/Pages/debtrelieforders/droadvice.aspx
Su says
Hi i am considering BRO and in tricky situation regards my car this is a lease car from employer and is deducted from pay before tax-NI is taken I am unable to work without a car will i be allowed to keep it
Sara (Debt Camel) says
Can I check whether you are looking at bankruptcy or a debt relief order?
Su says
Debt relief order a car is essential to my job
Sara (Debt Camel) says
Is there a cheaper option?
Su says
No i am not in a position to purchase a car i also do a lot of work miles and needs to be reliable
Sara (Debt Camel) says
That may be OK then, I suggest you talk to national Debtline on 0808 808 4000 and ask to speak to someone about a DRO.
Michelle says
When applying for a DRO what income is included. I receive pip and esa but We as a family with 1 child receive family allowance dla and enhanced child tax credit for my disabled child are these included as mine.
Also as I’m am disabled can my carer act on my behalf by speaking to the advisor so that he can relay vital information (I have seizures and may miss something during a conversation) and ensure im completing forms correctly.
Thank you
Sara (Debt Camel) says
All benefit income needs to be included, but for disability benefits, you can also have an expenses line for the amount. If your only income is benefits, I would not expect you to have problems with this, but your adviser will go through all this in detail with you.
You should be able to authorise someone to speak on your behalf to an adviser, but you would have to actually sign the application form unless someone else has a power of attorney. You may find a good way is to have your phone on speaker, so that you and your carer can both listen to the adviser? One of the most important things is to make sure every one of your debts is listed on the application.
Jayne says
Is it possible to have a joint DRO with my partner as we both have debts and our household income is all joined. He works I don’t. We’ve had a debt management plan when stepchange for some time but circumstances have changed and they are advising a DRO.
Thanks
Sara (Debt Camel) says
You both have to apply separately for a DRO, a joint DRO doesn’t exist. If StepChange are suggesting this it is likely to be much your best option.
Pam says
Thinking of applying for DRO on advise from stepchange. Will my bank account be looked into straight away and on a regular basis?
Sara (Debt Camel) says
No, no-one checks up on your bank account during a DRO, it isn’t an intrusive process at all.
Jean says
Hi, Considering a DRO at the moment, would barclays close my bank account as my debt is with barclaycard, I have no overdraft. Just wondering if I should switch banks before?
Sara (Debt Camel) says
I suggest that you should switch bank accounts now to someone you don’t owe any money to. Go for a basic bank account – no overdrafts and no fees, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/.
Barclays may not close your account after a DRO but it can take a while to get a DRO set up and the money in your account is not safe at the moment at Barclays have the right of set-off so they can just help themselves to your money.
John says
Hi, I’m currently 10 months into my DRO. I cant start a limited company at present because i cant be the director of a company. Once my DRO 12 month period has ended can i start a limited company and be a director?
Thanks
John.
Sara (Debt Camel) says
Yes.
Wendy says
Hi Sara I paid my £90 fee yesterday for my debt relief order set up by my local citizens advice bureau. Today I have been sent an email today about a payday debt asking for payment . O completely forgot about this debt and it was also not on any of my credit reports. I don’t know what I should do? Any advice please? Thanks . Wendy
Sara (Debt Camel) says
Contact the debt adviser setting up your DRO urgently – it may not have been submitted yet and up to then it can be changed!
Wendy says
Okay thanks Sara . Wendy
Michelle says
Hi, I have been i an iva but unexpectedly had to have emergency surgery and have another disability which means i am now on benefits and struggling. I have contacted a non profit charity debt company who are suggesting Bankruptcy or a DRO as my debts are just under 20K. What i am unsure of is if I become well enough to go back to work and come off benefits before the 12 months have ended on the DRO, what happens?
Sara (Debt Camel) says
Can you say how long your IVA has been running?
If you go back to work and come off benefits, it will depend on how much surplus income you have after paying your bills and essential expenses. If that is too high, your DRO is likely to be cancelled (“revoked” is the legal term that is used.) This can feel a bit as though you are being asked to predict the future… How much have you been paying into your IVA? Will it be easy to walk back into your previous job? Would there be likely to be a period where part time work is a good idea?
Mr Jones says
Hello,
I’d like to ask you about your statement: “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.”
If the maintenance load and grant count as income that is a bad thing because my income may be too high to qualify for the DRO. But I’m a mature student. So why do you say the DRO could be a sensible option? I’m a bit confused there. Can you help?
Sara (Debt Camel) says
It depends what your expenses are. Accommodation often takes up most of a grant/student loan leaving with little or no disposable income so you are able to get a DRO.
Mr Jones says
Am I right that they have no way of detecting a student finance grant because it does not go on the credit report?
Sara (Debt Camel) says
You will be asked about your income. If you say you are a student, you will be asked about loans and maintenance grants. If you are considering lying, this is a seriously bad idea. and the debt adviser setting up your DRO will normally ask to see bank statements anyway.
Michelle says
Ive been in the iva since last December but it is now failed 3 times with non payment since ive been on Benefits. I think I understand now, as at the moment i dont pay full rent or Council Tax so unless i get a really well paid job in the future I should still be eligible as I will be paying for those and my disposable income will still be low and possibly below £50. Does clothing and car repairs etc class as essentials? Thanks for your advice.
Sara (Debt Camel) says
You are right that even good pay rises may not make that much difference to your disposable income if your benefits are cut.
Clothing – yes. Including things like school uniform if you have children.
Car repairs – yes if your car is considered essential.
If you have a failing IVA and you are on benefits, a switch to a DRO is often a good idea. See https://debtcamel.co.uk/end-iva-change-to-dro/
Becky says
Hi I have a dro, and set up a new bank account, but have been paid some money into my old account, but I can transfer the money as I think they have frozen my account, can I get this money?
Many thanks
Sara (Debt Camel) says
Yes you should be able to. If the bank says No, talk to the debt adviser who set up your DRO.
Maurice says
Can you save any spare money you have when in a dro? Say u ended up with £45 a week after bills and could save £30 a week. ? £1500 a year. Would you have to declare this to anyone towards end of your dro ?
What kind of checks are done throughout the dro? Can an application be approved then revoked?
Im struggling now and dro just applied for but afraid to leave money in bank if it ever is spare
Sara (Debt Camel) says
There aren’t any checks, this is a non intrusive procedure. And you don’t have to complete any form at the end, your DRO just ends!
If you can save up some money every week that is a great cushion for you. Because if something goes wrong in a DRO and you urgently need money, you won’t be able to borrow it because of your credit record. So a few hundred in the bank can be a vital safety net.
In practice, you will be doing VERY well very to save £45 a month. Hardly anyone will people be able to save £45 a week in a DRO unless they have increased income, and that you do have to declare. The exception I supppose would be people who are living with family who don’t contribute much to food and other bills… if this is you, perhaps you should contribute more?
Jane says
Trying to get my son to consider a DRO but he’s worried about his car (and also worried meantime in case he has another bailiff’s visit). Without details I can’t check its value, but it could be over the the £1000 limit. It’s a very modest Ford estate but he needs something safe and reliable for getting to work (he works shifts) and for picking up his daughter from her mum’s and from nursery. An older, smaller replacement just wouldn’t be suitable. Someone has suggested I ‘buy’ it from him (it’s not on finance) so that it wouldn’t included in a DRO and any bailiffs can’t take it. Is it OK to do this?
Sara (Debt Camel) says
You can check the price of a car here https://www.parkers.co.uk/car-valuation/ – use the “poor condition” option.
Yes you could buy it from him, but it would have to be at the market price, not very cheap, for it not to cause a problem for a DRO. he really needs to discuss this – and what he would do with the money – with a debt adviser who sets up DROs before you do this.
Jane says
So to what extent would an adviser check this? I’ve already shelled out a considerable amount to pay some of his other debts (using my credit card) and I’m wondering whether his handing over ownership of the car as payment would be acceptable. Could he issue a receipt to me, signed by us both, to say that I’ve taken the car from him as his repayment for that debt?
Sara (Debt Camel) says
No, because that would be repaying a debt to you, rather than splitting the money fairly between his other creditors. How much is this car worth roughly?
Jane says
£1845 – ‘private, poor’. It’s a 2006 model. Anything older or smaller would probably cost more in maintenance and/or be unsuitable for family use or regular motorway journeys. Plus it’s unlikely he’d be able to raise that amount if he sold or PX’d it.
Sara (Debt Camel) says
Then it’s not close to the DRO 1k limit. I really do think he needs to talk to a DRO adviser about his whole situation – at present you don’t even know if he will meet the other DRO criteria apart from the car.
Jane says
You’re right there. I’m going over to talk to him tomorrow and we’ll see where we’re going from there.
Thanks for your help.
James says
Hi there,
Just applied for a DRO through stepchange.
I paid my £90.00 fee and then called Stepchange to advise of current balances.
They then said that they had more questions relating to my budget, which i wasn’t expecting, as they had sent me the bar code for payment.
Anyway they had a query about my mobile phone bill £76.99 per month + £12.99 insurance but there is also an I pad is contracted to the account at £25.00 per month Total £114.98 per month.
They said it would be better to include these costs in The DRO, but the problem is there are at least 10 months to run on the contract meaning the amount owed for cancelling the contract early would take me above the £20,000 threshold to qualify.
So they said ok well we are happy to submit on that basis, but it may flag up to the insolvency service.
Any advice or thoughts on this?
I’m really hoping that a DRO is awarded as stress levels are now topping out..
Thanks for any advice and comments.
Sara (Debt Camel) says
I can’t really say anything useful, sorry, this does depend on the exact details of your case, who the creditors is for the mobile and insurance and ipad, how large your debts are and what your disposable income is. StepChange are in the best position to talk to you about this. Is there any relative who could pay off the remaining 10 months of the phone contract? If StepChange don’t think it will go through, then it may be better to make token payments and then submit the DRO in 10 months time.
James says
Thanks for the reply.
If we don’t include the phone bill in my budget I am then left with more than £50 disposable income per month meaning I wouldn’t qualify for a DRO again. And also obviously the total debt would rise above £20k.
Well they have submitted it, so I’m hoping they have done that with my best interests at heart.
Fingers crossed
Sara (Debt Camel) says
ok, good luck. And don’t ever think of paying that much for a phone in future !
James says
Hi
Once submitted (mine was Monday 19th Nov), how long typically before they are approved?
Thanks
James
Sara (Debt Camel) says
Normally just a few days, see the “How long does it take to approve a DRO?” section in the above article.
James says
Really happy to say my DRO was approved
Yesterday (I would never have thought insolvency was something that would make me happy 1 year ago!) the relief is just so enormous.
Thanks for your advice through this week.
James
Sara (Debt Camel) says
Well done – very few applications are rejected, but I didn’t want to jinx yours by saying that!
alma says
Hello,
I lost a civil court case earlier this year, and was ordered to pay over £10000 to the other side. As it seemed that they were not interested in enforcing it, I took out a business loan of £7000 to start up a new business. If they later decide to enforce the amount ordered, or I get into financial difficulty with my new business, will I be able to apply for a DRO?
Sara (Debt Camel) says
That will depend on whether you meet the DRO criteria at the time. It is a bit odd that you were given a business loan with such a large unpaid CCJ on your credit record!
alma says
Hello,
Would they consider the business loan as irresponsible?
And, because I can only have £1000, will they require evidence of how I spent the £7000?
Thanks!
Jamed says
Hi there,
So i was granted my DRO on 21st November, which was a massive relief.
Came home from work yesterday to find a letter from the HMRC saying they owe me £1340 in overpaid tax from 2017/2018.
I’ve spoken with the insolvency service about this and emailed the details of the HMRC letter.
I was pretty close to the £20k threshold when approved and my disposable income was at minus £79 per month.
The guy I spoke to said due to level of the debt the DRO would in high probability not be revoked. But have to wait for them to reply.
Any thoughts? Who’d have thought getting a tax refund could be a stressful thing!
Thanks
James
Sara (Debt Camel) says
You have reported this to the IS promptly – that’s good. Read https://debtcamel.co.uk/dro-income-up/ – as that says a windfall of £1340 comes into the “discretionary” area where the DRO unit can decide not to revoke your DRO. Reporting it promptly helps with this as it shows you are being open. And your high level of debt will also help.
Less than 1% of DROs fail – fingers crossed you will be ok!
Jamed says
Thanks so much for the reply.
Can’t cope with the stress!
Fingers crossed, will update.
Jamed says
Hi again..
So so happy to say, I received a response from the OR..
They said that they had considered my case very carefully, and no further action was required.
Although and they stressed this was exceptional.
I’m now able to sleep again!
Glad I was honest and up front. No other way really. You enter a DRO and those are the terms and conditions.
Phew!!
Thanks as always for your advice
Sara (Debt Camel) says
Happy days! I hope the rest of your DRO year goes smoothly.
Jamed says
Thank you – I can honestly say it has been one of the most stressful times of my life.
Your advice has been really honest and has helped me make the right decisions.
Thank you again
Sam says
How long it takes to get a response from the official receiver after paying 90 pounds (fee for the application)
As I am worried if the interest take it above 20000 pound
I am a bit anxious and stress
Thank you in advance
Sara (Debt Camel) says
After you pay the £90, you tell your adviser and then they submit the application It is usually only a day or two for the Insolvency Service to approve it. good luck!
Sam says
Thank you
I will keep you posted.
S says
Hi StepChange have advised I go for a DRO and asked for my noddle credit file, I didn’t realise my mobile phone would be listed and that bumps me over the £20,000 by about £400. Would my wife or family member be able to make equal payments to my debts for me to bring the amount owed down? I spoke to the insolvency service today and they said they cannot object a third party payment but couldn’t say for sure if my DRO would be rejected.
Sara (Debt Camel) says
Yes someone in your family could pay off £500 of debt to take you under th limit. This doesn’t have to be equally divided between your creditors – this is only if you are making the payments. If it is a third party they can pay off who they like and this isn’t considered “preference”.
The Insolvency Service will never say that an application will be accepted. But if StepChange think it will you can trust that!
Sam says
Hi
If my dro gets rejected will I be able to apply for bankruptcy?
Thank
Sara (Debt Camel) says
Yes.
Sam says
Good morning
I have submitted my DRO application through Stepchange on the 08.12.18
My balance was £19500.than
I am worried by the time the decision made by IS my debt will go above 20k due to the interest. Added to my credit cards
Do you think if it’ is the case
Will this affect my application?
Thank you.
Sara (Debt Camel) says
Have you asked StepChange if they have received a message yet saying if your application has been approved?
Sam says
Hi
Not yet
But the said it means think is under 20 k when you submitted the application not afterwards
I hoping if you can share some light on it and with your past experience
Also is there I link to check the status of my application
Thank you again and much appreciate you supports
Sam
Janes says
If you submitted on 8th December I would imagine it has been approved now.
Check the insolvency register for you name.
Jamed
Sam says
Hi
Thank you.can you pls send me the link
As when I was trying it coming IVA&bankrupcy cases only
Much appreciated
Sam says
Hi again
I have checked and is on the register
I am not sure if this means is been accepted.it says at the bottom
Footnote The debtor’s Moratorium Period End Date is in accordance with Section 251H of The Insolvency Act 1986. As of this date, the debtor will be discharged from the qualifying debts
Honestly, don’t understand
James says
Hi Sam
If you are now on the register – you’ve been approved!
James
Sam says
I hope so I will contact Stepchange tomorrow to double check and have pissofmind and confirm on a reply tomorrow
However, I really appreciated your support
Thank you
Sam says
Hi
I called Stepchange they confirm it has bee approved !
Thank you for your support
Jem says
Hi, I have a few questions. My debt is around 10k & stepchange have advised a DRO, I’ve recieved my forms etc. Firstly, do I need to send them bank statements? Also what happens with my mobile phone contract & car insurance renewals? Will I be able to still pay monthly once the DRO is in place?
Thankyou in advance.
Sara (Debt Camel) says
You need to send them bank statements if they have asked for them.
Mobile contracts – the best thing is usually to switch to a SIM only contract for a year or two, not upgrade, as it’s a lot cheaper! You are only likely to have a problem with an expensive upgrade.
Paying car insurance monthly isn’t normally a problem, especially if you renew with your current firm. If you have to switch, some firms mind DROs but many don’t.
StepChange will be happy to answer these sorts of questions for you!
Emma says
Hi Sara,
I am 8 months in to my DRO. My husband is getting a works car and is giving me his car. He is going to remain the registered keeper I am just going to insure it so I know that I am ok on that front.
When I come to sell my car (prob get approx £500-£700 do I have to let them know?) What if I transferred the registered keeper into my husband’s name and he then sold it?
Ema says
Anyone got any advice please???????
Sara (Debt Camel) says
How much is his car worth?
Many insurance companies will not insure you unless you are the registered keeper. But he could continue to own the car, just let you drive it?
Em says
He is going to continue owning the car my query is what to do with mine as I am the owner of it but if I sell it will my dro be revoked? Don’t get more than 1000 for it as it not worth that.
Or if I can’t sell it am I allowed to transfer ownership to him?
Sara (Debt Camel) says
You should inform the DRO unit if you sell it. A revocation is unlikely but to be sure you should talk to the debt adviser who set up the DRO. Of course you may decide it is just less hassle to wait until the DRO has completed.
Me says
What tenancy agreements, or leases, would constitute ownership and disqualify from getting a DRO? I assume it would be based on the term of years granted. If so, how many years makes the difference?
Sara (Debt Camel) says
I am not sure generalisations will help here if you think your case isn’t clear. Can you give some specifics?
Me says
I’ve been told that some leases are considered ownership and will disqualify from a DRO. Someone has offered me an acre of land to grow vegetables which is my business. So its essential to my business. But I’ve been told it depends on the terms of the lease. So that’s what I’m asking you. What aspects of a lease disqualify from a DRO? Is it the length? I know that a lease that is longer than 7 years is considered a registerable title at Land Registry. Would that be the same qualifying factor?
Sara (Debt Camel) says
As this is mixed up with your business, the best people to talk to about this (and about your general situation and whether a DRO is a good idea for you) are Business Debtline, see https://www.businessdebtline.org/.
Me says
They wont answer my emails. I’ve asked them a few times. It seems no one knows. But it was them who mentioned that leases can disqualify from a DRO because they can be considered ownership.
Sam says
Hi Sara
If you get asked if you had a court judgement on application forms will DRO be considered as a CCJ
Sara (Debt Camel) says
No, it is a form of insolvency, not a court judgement.
Michelle Evans says
Thank you in advance for advise.
Couple questions concerning DRO
My partner and due to Ill health my son and I have mobile phones with contracts they finish March 2019 August 2019 and October 2020 these pmts come fm my account will I be able to retain the contracts and replace them with payasugo as they expire on a dro.
At moment I am paying credits card minimum pmts then robbing Peter to pay Paul by using available balances to purchase food petrol etc do I need to be in arrears before starting a DRO.
Kind regards
Michelle
Pat wells says
Good morning
I pay £250 month to my dad for a HP car which is in his name, he took out for me, has 12 month’s left and my adviser has stated i can’t have a DRO as the car payments i pay him are not an allowable expense. I am in a deficit budget of £50 too. Is this correct?
Sara (Debt Camel) says
How much is the car worth at the moment? IS it essential that you have a car?
Me says
If I get a DRO for a particular debt, and the debt was sold to a debt company, just a few days before the DRO was granted, does it mean that the debt is no longer included in the DRO because it is now a debt to a different creditor?
Sara (Debt Camel) says
It should be OK, talk to the adviser who set up the DRO.
Me says
Hello,
Can a creditor object, or appeal against, a DRO?
Sara (Debt Camel) says
A creditor can only object if they think you didn’t meet one of the DRO criteria – for example if they know you have debts that weren'[t included in your application that take you over the 20k limit, or that you own a property. This is very rare.
Me says
“or that you own a property”. I suppose that can apply to owning money paid in a loan. So if a creditor lent an amount of money and then a DRO is applied for, the creditor can object on the grounds that the applicant was recently given an amount of money. Would that then lead to the receiver demanding evidence of where the money went?
Sara (Debt Camel) says
a property refers to a house (or land) specifically, it isn’t a general word for an asset such as money in a bank.
Me says
Ok, but could they object on those grounds that they believe the applicant cannot prove he spent the money?
Sara (Debt Camel) says
Why would a creditor think you haven’t spent the money?
Sorry but if you have a specific situation in mind, you need to explain what it is.
Me says
If, for example, the loan was for assets totalling more than £1000. The creditor will think “he either has assets of more than £1000, or he still has the money”. Can he successfully object?
Sara (Debt Camel) says
I think you are over-thinking this. The creditor will assume you have spent the money, perhaps wisely, perhaps unwisely. But it isn’t likely that a creditor would think of objecting on those grounds. Most people who buy things with a loan end up with second-hand stuff that is worth very little.
Kim says
Hi there step change have said that a dro is better for me I have no bank account and I don’t work and do no receive any benefits as partner works what would I need to send them do I need to apply for a birth certificate or passport national insurance number etc
Worried they might ask for paperwork I just don’t have
Sara (Debt Camel) says
people do not normally get asked for a birth certificate or passport, but I guess there will need to be some means of proving your identity. Sorry you really need to ask StepChange what information they require – there is no point in worrying here until you have the facts.
Steph says
Hello, my partner has just applied for a DRO, how long if its accepted will it show on the register? He checked on day 6 but he name wasn’t on there is that a bad sign?
Thank you
Sara (Debt Camel) says
Are you sure when his application was submitted? This isn’t when you paid the £90, it is when your adviser submits the application.
It is normally on the Insolvency Register the next working day after it is approved, which is 1-3 working days after it is submitted to the Insolvency Service.
It is VERY rare for an application not to be approved. Unless your adviser has warned you that there may be a problem, you should be fine.
Steph says
Hello,
So he paid it last friday the 18th and received a letter from stepchange on the tuesday saying it had been submitted, but still nothing on the register, they did say it will take up to 10 working days to receive a letter but just getting worried now. Nothing was said about any problems with the application.
Sara (Debt Camel) says
I suggest he phones StepChange on Monday. The debt adviser hears before you get the letter. Come back and say what happens!
Me says
Hello,
How far back does the receipt of money effect the DRO application? I mean would money received during the last 12 months before the DRO application need to be declared and accounted for?
Thanks.
Sara (Debt Camel) says
It doesn’t have to all be listed specifically and accounted for. But the debt adviser setting up your DRO looks at recent bank statements and will be likely to ask what you did with recent loans. The larger the amount and the more recent this is, the more it matters. No one will much care what you did with a £300 loan 10 months ago, but you will be expected to remember if it was a few weeks ago, or if it was £15,000.
It’s going to be easier to say something useful for you if you could be a bit more specific – how much did you borrow, how long ago and what did you do with the money?
Me says
I had a loan of £4000 6 months previously, and a student finance grant will show up within the last 12 months, although I will no longer be a student. That grant totals £4500. I can honestly say I am not a student, but 12 month bank statements will show the money.
Sara (Debt Camel) says
So what did you do with the money?
Me says
Mainly, I funded a business that did not take off. Assets remained under £1000, but difficult to account for every £ spent. General expenses, including living expenses.
Sara (Debt Camel) says
Your bank statements may show significant purchases and will show your everyday living expenses. Presumably you have some evidence of the business. If you have mixed up business and personal expenses, it might help you to talk to Business Debtline https://www.businessdebtline.org/ – they are used to helping people sort out this type of situation. And they can pass you to their sister company National Debtline if they think your DRO is better handled by ND.