A Debt Relief Order (DRO) is often the best debt solution if you have under £30,000 of debt (this is increasing to £50,000 in June 2024), 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.
See What is a DRO? which looks at the eligibility criteria and how to apply for an overview.
Here are some common questions I hear about DRO applications.
Contents
Questions about eligibility and suitability
The DRO criteria are fixed numbers, not rough guidelines, and you will have to meet them all. Your DRO Adviser checks this and won’t submit your application if you don’t.
I’m self-employed, I make little money but it’s erratic
You can have a DRO if you are self-employed. Business Debtline are good people to talk to about your situation as a variable income can make it harder to judge.
My bank account often has a lot more than £75 in it so will the Insolvency Service reject a DRO?
This isn’t a problem. Your DRO adviser will do a proper check on your income and expenditure and if they say you meet the “under £75 spare income a month” test, then you are going to be fine.
I have applied for PIP but don’t know if I will get it
Tell your DRO adviser. If your only income is from benefits, this probably won’t matter. You have probably been spending less on some things than you should and the PIP will let you cover a lot more of the costs associated with the disability.
Even if you have other income it may be OK – although your income may be going up, your advisor can include extra disability expenses.
If you get a backdated amount when your PIP application is accepted, this won’t be a problem for your DRO. Backdated “premium” amounts that are added to other benefits when you get PIP can be a problem – talk to your DRO adviser about these.
Does it matter if I went bankrupt 4 years ago?
No. The DRO Unit of the Insolvency Service will only refuse your application because of previous insolvencies if you:
- are currently an undischarged bankrupt; or
- you are currently in an IVA; or
- you have had a DRO in the last six years.
I’m staying with friends but when I get a place to rent, I will have no money
Applying for a DRO at the moment probably isn’t a good idea!
I suggest you save up the money for a deposit and move out. Then you will know what your expenses are and what your surplus income is. Also, it can be simpler to find somewhere to rent without a DRO (or bankruptcy or an IVA) on your credit record.
You may well be right that you will be broke when you have moved, but getting yourself settled in a new home 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 have a car on finance – does this count as an asset?
No – you don’t own it.
But read Cars on finance and DROs which looks at some complications with cars on finance and DROs. These may not be a problem for you, but you need to discuss this with your DRO adviser.
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. But if you will finish your degree and get a well-paid job within the DRO year, a DRO may not be a good idea for you – talk to your DRO Adviser about this.
(As you expect to earn more in the future, students should generally avoid an IVA where your payments would increase a lot.)
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 being asked about their income so that it can be checked that the rent and bills are being fairly divided between you. If you earn the same, a 50/50 split would be normal.
We are both going to need a DRO – how do we divide up the expenses?
Expenses are usually divided in the same ratio as your income. So if you both have about the same income, you spilt the rent, council tax, and all joint household bills 50:50. If your income is twice what your partner’s is, you would be expected to pay 2/3 of the bills and your partner 1/3.
But you don’t have to sort these numbers out, get the same debt adviser to do both DROs and they will do all this.
My parents have been giving me money to help with my debts
Those are gifts and they could stop at any time. They don’t need to be reported on your DRO application as income because they aren’t income.
Is my car worth what I can sell it for?
You can get a valuation using Parker’s Guide, This gives a range of values for your car – talk to your DRO adviser who may agree that the bottom end of the range is likely to be acceptable.
I have a car registered in my name for insurance, but it’s owned by my mother – what will happen?
Tell your DRO Adviser but this should be fine. What matters is who owns the car, not whose name is on the insurance or the V5 registration. You will probably need to provide some proof about who bought the car.
I’m unemployed and I pay my mum £30 a week for rent and board – is this allowed?
That isn’t going to be a problem – it would cost you far more to rent a room privately somewhere else!
I’ve made an affordabilty complaint – should I delay until this is sorted?
Possibly but unless the refund will be large, it may be best to get on with the DRO now. Read “If I get a refund, what will happen to a DRO?” which looks at this in detail.
Questions about debts
Why do I have to get my credit reports?
You are being asked for a credit report so that your DRO Adviser can be sure all your debts are being listed. This is for your own protection – any debts which are not listed on your DRO application are not included in it and so you will still have to pay them.
What details are needed about the debts?
Who the current creditor is, the amount and the reference number. If there are several reference numbers – the original credit card number, a debt collector account number and another number on your Experian record say – list them all to be on the safe side!
Do I have to include my broadband/mobile/car insurance contract which still has over a year to run?
These are “service contracts” – you aren’t repaying a loan, just paying for a service, eg supply of broadband, throughout the year. You don’t generally have to include service contracts unless you are behind with the payments – in that case they do have to be included.
But you need to check with the adviser setting up your DRO that the payments will be allowable as an expenditure.
With a mobile contract, it may be set up as part loan and part service contract. In this case is it usually possible to include the contract in your DRO but keep the handset and then get a PAYG sim-only contract. Talk to your debt adviser about this.
I stopped paying most debts ages ago but still pay two catalogues – is this a problem?
Technically this is called “preference” – paying some creditors and not others. That may sound alarming, but it’s pretty common. Although the DRO Unit can refuse a DRO application if this has happened, they assess how serious the preference was. Most people don’t have a problem:
- if the preference was a while ago and before you took advice about a DRO, it matters a lot less – so from this point you must treat all your debts equally. For most people this means not paying anything to any of them. BUT don’t stop paying any priority debts without talking to your DRO Advisor first!
- if you had been paying a family member or a friend and not paying commercial debts, that is seen as more serious;
- paying the normal monthly amount to a mobile contract does not count as preference.
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. It it is possible but rare that some extra restrictions may be imposed if the DRO Unit thinks you have behaved recklessly.
Talk to your DRO Adviser. Some DRO Advisers don’t like putting in an application unless you haven’t used any credit for several months, but if the amount was small, or for an urgent need, you may want to carry on with it.
Once you have decided to apply for a DRO you should not use any more credit.
I have a car on HP – is this debt included
Normally all debts have tio be included in a DRO but this is one of the very few situations where you have a choice. See DROs – what if you have a car on HP? for details and talk to your DRO adviser about this as it can get complicated.
I am repaying a Universal Credit advance – can this be included?
Yes. UC Advances are debts that should be included in a DRO. When the DRO is approved, any deductions from your current benefits for these should stop.
This also applies to benefit and tax credit overpayments. But it does not apply to Social Fund loans – these cannot be included in a DRO.
I’m confused about rent arrears
Rent arrears are a debt that has to be included in your DRO. But if you are still living there, you are allowed to carry on repaying the arrears and if you don’t, the landlord or Housing Association/Council may try to evict you.
Talk to your DRO Adviser about this – it’s important you get an affordable arrangement in place to repay your rent arrears in place.
This is one case where going to your local CAB for help with a DRO is good as they may know what policies local Housing Associations have.
I have cleared rent arrears and not paid other debts
Normally you have to “treat your creditors the same”. But this doesn’t apply to any priority debts such as rent arrears, council tax arrears, energy bills etc. Paying these a lot more than debts like credit cards does not count as a “preference” and won’t stop you getting a DRO.
Questions about the application
Who can help me with this?
It doesn’t matter who you go through, the DRO you end up with will be the same. StepChange is no longer setting up DROs, so I suggest:
- Citizens Advice – they set up more DROs than any other advice agency. They can also help with benefit advice and talking to your creditors if you have urgent problems with energy bills, bailiffs etc
- if you would prefer to talk to an adviser on the phone, call National Debtline on 0808 808 4000.
When my local Citizens Advice has checked my DRO do I then apply to the Insolvency Service?
No. Only approved intermediaries can submit an application for a DRO, you can’t do this.
Your DRO Adviser gets the information to go on the application from you and your credit records. You then have to sign to authorise them to send in your application.
How long does it take to approve a DRO?
It’s quick! Your DRO Adviser will usually get an email a couple of working days after submitting the application to say it has been approved.
You are sent a letter confirming this, called the Debtor’s Notice. It is posted the same day your DRO Adviser is told, so you usually get it the day after your DRO adviser knows.
Keep this letter safe, even when your DRO has finished, because it proves what debts are included in your DRO.
The Insolvency Register is also updated, showing your DRO.
How many DROs are rejected?
Only a tiny number of DRO applications are rejected – less than one in three hundred applications.
If your adviser has agreed to put your application forward, it is because they have already made all the checks and they don’t expect any problems.
How long do creditors have to object?
Creditors don’t have to agree to your DRO, there is no set time at the start for them to approve or object.
A creditor can only object if they think you didn’t meet one of the DRO criteria. This doesn’t happen very often, and then the DRO Unit have to consider if the objection is accurate – most of them aren’t. It is VERY rare for there to be a problem with this – you don’t need to worry about it.
I am just about to apply 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’m just about to apply, literally days, 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. NatWest and Halifax sometimes make you downgrade to a basic bank account from a standard current account.
Your bank isn’t told you have started a DRO. However some banks check the Insolvency Register daily and so will know that you have had a DRO even though they have not specifically been told.
Who is told I have a DRO?
Your creditors are told, your name is included in the Insolvency Register (which lists people with bankruptcy, IVAs and DROs) and a marker will be added to your credit record.
There is a procedure to not include your address on the Insolvency Register if you have had domestic violence or similar issues – talk to your DRO Adviser if you are worried about this.
Your partner isn’t told – but it is always a good idea to tell them yourself!
Your employer isn’t told unless you owe the employer money or unless you have an attachment of earnings in place (which will stop) in which case your employer is contacted.
Your landlord is only told if you have rent arrears.
Will a DRO affect my partner’s credit record?
Only if you have a joint bank account or loan with them.
Do I have to send in monthly statements?
No! No one checks up on your income and expenditure during the DRO year. Or at the end of the year.
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 questions here.
But tell your DRO Adviser about any concerns or questions that you have. Not just about your current situation and the application process, but about what may happen in the next year. It’s much better to have this discussion before an application goes in.
Will more pay or a windfall affect a DRO?
Do debt collectors still phone after a DRO?
DROs and your credit rating
Adam Bate says
Hi, I’m thinking of applying for a DRO. I have debts around 14k and am currently a student. Would my student finance maintenance loan be classed as income or windfall? Also I have a car on hire purchase with a value of £800 but 1k left to pay, would I lose the car as I need it to get to work and uni.
Sara (Debt Camel) says
Your maintenance loan is classed as income. HP on a car can be difficult (see https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/debt-relief-orders-explained/how-income-debts-and-belongings-are-assessed-for-a-debt-relief-order/) but you may be OK – you need to talk to a debt adviser who sets up DROs about this.
rosie says
I need to apply for a DRO but when I applied for my credit card I said I was working when I wasn’t. Will they check this?
Sara (Debt Camel) says
How long ago was this?
Neil says
Hi I have debts of around 11000 and I’m a self employed taxi driver with a car on hp. I owe around 15000 and the cars value is around 12000 at most. Would I be able to keep the car as it is my work?? Also what is required off me as in paper work as I’m self employed
Sara (Debt Camel) says
If you have any arrears on the HP agreement it has to be included in your DRO and you would then be over the 20k total debt limit.
If you don’t have any arrears, you can choose to leave the HP finance out of your DRO, but it is possible the lender may choose to terminate the HP agreement anyway. And you may not be allowed to count the HP payments as an allowable expenses, in which case you would fail the £50 a month spare income test.
I suggest you talk to Business Debtline https://www.businessdebtline.org/EW/information/Pages/default.aspx – they can look at whether a DRO is a possible for you and, if it is not, what your other options are.
Gary says
Hi, I would like abit of advice please. I have debts of £19,500 …have less than £50 a month spare, live in a private rented house, but I have a car registered in my name due to insurance reasons worth £1500, but it’s owned by my parents…would the OR see this as my car? even though it’s not please? I have been through a checklist and I qualified to apply but as yet I’ve not sent the application in.
Thanks for your help.
Gary
Sara (Debt Camel) says
You should be OK, what matters is who owns the car, not in whose name the insurance is. It’s perfectly legal for you to drive and insure your parents’ car. You will probably need to provide some proof about who bought the car – talk to the debt adviser who will set your DRO up about this. And don’t delay… £19500 is very close to the 20k limit!
Gary says
Thanks for your reply, the worry I have is that it’s registered in my name so it looks as though it’s my car , I will have to mention it to my debt advisor yes.
Sara (Debt Camel) says
The V5 registration doesn’t prove who owns a car – your debt adviser will be used to this sort of problem. Good luck!
Keith says
I have a question regarding Capital One,who disregard the current rules regarding DRO’s. They are adamant that the debt is not wiped out when a DRO is granted and insist that they have the right to recover all or part of the debt from a PPI refund,dating from 1998 and actually offered in 2016 ( and this was 6 years after the DRO ended in 2011 ) They have even said that the Financial Ombudsman agrees with them and will not accept that they are wrong. What happens next ?
Sara (Debt Camel) says
I suggest you send the case to the Financial Ombudsman!
Sarah says
I am thinking of requesting a DRO. I have 15k of debt which due to personal circumstances I am no longer able to pay. My daughter has a motability car but is not adapted would this be allowed as it is in her name but not able to drive it herself? Also as she is now 16 and I am her appointee, would I include her money in my income? As even though it is hers, it goes into my bank account as she’s not able to manage her own money.
Sara (Debt Camel) says
A motability car is not owned by you or your daughter, it is not an asset. Your daughter’s benefits are not relevant to a DRO for you. I suggest you talk to National Debtline who can go through whether you meet the DRO criteria, but nothing you have just mentioned should be a problem.
Sara says
Hi Sara
I have a question. If you are married but the mortgage and house deeds are only in your husbands name. Can you still have DRO.
Sara (Debt Camel) says
Potentially, yes. But it does depend on whether you might have any “beneficial equity” in the house. For example if you had provided some money for the deposit, or paid the mortgage or paid for a new kitchen… I suggest you talk to National Debtline and they can look at the details of your case.
kirsty says
hello I have just applied for a DRO and the debt advisor has done my budget which shows I am spending more than I have coming in but what I have told her shows I have £10 extra per month but the way she has worked it out shows I am spending £47 more because my budget shows I am spending £47 more than I have coming in will this mean I will be rejected for the DRO
Sara (Debt Camel) says
This shouldn’t be a problem. I saw some Insolvency Service figures a couple of years ago which said that 20% of the people getting a DRO had negative surplus income, ie they were paying more than they had coming in.
kirsty says
thanks I’m just thinking that the person who makes the decision might think I will get into debt again the only think is the way the debt advisor has worked my outgoings out shows I’m surplus £47 but if worked my outgoings out and I’m £10 in credit
Kirsty says
Hello I was just wondering about an IVA my advisor say my debts have to be more than 12 months old to apply for this is this correct
Sara (Debt Camel) says
In an IVA your creditors have to approve the IVA. If a lot of your debts are very recent, this may be harder, but there is no absolute 12 month limit.
But you have commented on an article about DROs, not IVAs. Unless you have assets to protect, an IVA is unlikely to be a good debt option for you. Ether a DRO (if your debts are under 20k and you are renting) or bankruptcy would probably be better if your debts are unmanageable. IVAs last much longer, you pay much more, they are NOT better for your credit record than a DRO or bankruptcy and more than a quarter of IVAs actually fail, leaving you with all your debts plus the high IVA fees.
What adviser have you been talking to?
Berny says
Hello,
I’m currently a full time student enrolled on an access course. If I applied for a DRO now would it be revoked when I start university (next sept) because of my student finance? I’m on benefits now and have no job and two kids under 10?
Sara (Debt Camel) says
I think that should be fine, but you need to talk to a debt adviser who can set up DROs and this is one of the things you should mention.
Michelle says
Hi I have a DRO in place and will end in Dec 2017..i had a lot of rent arrears and theses were added to the DRO.but I have been informed that you don’t get these wiped of.
Sara (Debt Camel) says
Rent arrears are complicated. Even though they are included in your DRO and do get legally wiped out, the landlord still has the right to evict you for non payment of the rent. You need advice about what your particular landlord is likely to do… talk to the person who set up your DRO.
David says
Hi, I have a weird one here. I sent a CCA letter to a credit card that is by far my largest debt, and they haven’t produced the paperwork, so the debt is now unenforceable. But it looks like this might have been a huge mistake by me, because being unenforceable means it’s not a liquidated debt and isn’t included in any DRO. Now I can’t apply for a DRO as I meant to, because if I do then it won’t include this debt, and all that has to happen is for the creditor to find the paperwork after the DRO starts, and I’m back on the hook for it. It seems like this can’t be right, and yet it’s there in black and white in the legislation. Have I missed something?
Sara (Debt Camel) says
Have you actually spoken to a debt advisor who sets up DROs who has said that this debt is unliquidated?
David says
No, Should I? That part is all so black and white, unliquidated is so clearly defined in all the legal stuff, that I didn’t even think of bothering to.
I’ll mention it to them if it comes up. Nothing’s happening for a few months yet anyway.
Cheers Dave
Sara (Debt Camel) says
No it’s not black and white. The reference to unliquidated debts is to exclude debts where the amount is uncertain, otherwise it’s not possible to know whether the 20k limit is breached.
David says
Sorry for the delay as I’ve been chasing a creditor. Also I apologise, you’re right, I said “liquidated” but I meant, um, “payable in law” or something. I just meant it wasn’t a qualifying debt. I checked the DRO intermediaries’ guidance and it seemed to say a debt that they’re satisfied isn’t legally enforceable at application time, can be left off, although the client certainly ought to have declared it to them.
Anyway, believe it or not that is my situation! The unenforceable debts are huge and I can only get a DRO if they’re both left off. One of them the bank admits it’s permanent. The other is a debt buyer and I’ve dug deep over 6 months and even the original bank says they just can’t find the original pre-2007 terms. But it’s always possible of course.
I even have a friend who’d stump up for a lump sum IVA, but it’s only enough if the unenforceable ones get far less than the others. But StepChange couldn’t even refer me to their IVA team to ask about that, because they said all debts, even if unenforceable, have to be treated equally in an IVA. I know we gotta be fair, but the unenforceable ones aren’t going to be paid anyway because my other choice is bankruptcy (which I really want to avoid and also I’d rather pay the creditors something back).
So I’m thinking hard about what to do next, but haven’t come up with any brilliant ideas yet!
Sara (Debt Camel) says
let’s have some numbers
Unenforceable & bank admits is permanent – how large? last payment to this debt was roughly when?
no CCA – how large/ last payment when?
other debts – how large/
friend stump up money for IVA – how much?
David says
No CCA – £11600, last paid (or acknowledged in writing) 8 months ago
Permanent – £6300, last paid 8 months ago, they’ve offered to amend my credit file to say will never take legal action
Other – £19800, spread over 8 creditors, last paid 8 months ago
Friend – £680 for bankruptcy fee or £4000 to settle, I know that’s only 20p in the £ even without the big ones, but I hope banks might prefer that to nothing. It’s 4 years since the business went under and I’ve only managed to pay off 1p in the £ in that time. Without a lump sum IVA I fear it doesn’t work because even if half of them accepted the 20% then I’d still need a DRO for the other half.
Sara (Debt Camel) says
I suggest bankruptcy sounds like your most sensible option then. The payments are too recent to make statute barred route be of any practical help. If you would otherwise qualify for a DRO, there is very little practical difference with bankruptcy apart from the stupidly high fees. Bankruptcy is no worse than a DRO or an IVA for your credit record.
simon says
hi im thinking of applying for a DR0.Im on ESA and DLA. My wife bought me a motorcycle to get me out and about as i was in doors 24/7.the bill of sale is in her name.but logbook and insurance in mine. will they take my motorcycle away. even tho the bill of sale is in my wifes name. just i would never go out if i didnt have it.
Sara (Debt Camel) says
This is your wife’s motorcycle, it won’t matter for your DRO, you will just need to produce the purchase documents to show this. The fact she lets you use it and therefore the insurance and vehicle registration is in your name doesn’t change the legal ownership.
Jayne says
Hi I had a dro in April 2011 I am now in debt again £7500 can I have a dro again ?
Sara (Debt Camel) says
Yes, you can. You can’t have one within 6 years of the date your previous one started, but you are now past that point.
Jason Jones says
Just a quick question I have been in a dmp for 10 years, and have about another 20 years before I’ll be debt free. Would it be worth looking at a dro if I can get my present debt below £20000? And would I be allowed to go from a dmp to a dro? I owe £25000 at the moment would I be able to borrow the money from family to get below the £20000 for a dro?
Sara (Debt Camel) says
How much are you paying to your DMP each month? Are you renting or buying?
Jason Jones says
We are renting, and I pay £112 a month but I am working two jobs to afford it
Sara (Debt Camel) says
are you sure your family member could afford 5k as a loan to you?
If you are, then my first thought would be to offer your creditors 20p in the £ as a final settlement, see https://debtcamel.co.uk/debt-options/less-common/full-final/. Say a relative is offering you this money if it will let you settle your debts (include a letter from them saying this!) and that if it isn’t accepted you intend to go bankrupt as your DMP will take 20 years to finish. 20% is a pretty good offer for a DMP that has been running 10 years!
An even better option would be to first ask all of your creditors to produce the CCA agreement for the debt – this only works for loans and credit cards, not overdrafts, mobile bills or other types of debt. The reason to ask is if the CCA agreement can’t be found, then the debt can’t be enforced in court … so you could simply stop paying. There are details about this, including a template letter, here: https://www.nationaldebtline.org/EW/factsheets/Pages/getting-information/credit-agreement-advice.aspx and note that you have to send £1 with your request!
If the creditor does produce the agreement, you offer them the 20% Full & final offer. If they don’t, then you cross them off the list and stop paying and save you relative some money. There is a very small risk the CCA agreement will be found later, but if it is, you make an offer to settle it then.
With such old debts I would be surprised if all the creditors produce the CCAs.
To be clear, yes you can switch from a DMP to a DRO, or to bankruptcy. If you were only a couple of years into the DMP and looking at 20 more to go, then this is something to look at seriously. But after 10 years of a DMP, and with you being able to get hold of a lump sum, a F&F offer may well be a better option for you.
james says
HIya I’ve been advised by a debt management firm that there is little or no chance to get a DRO as i am employed? yet after my rent and food …I have my children stay over 4 nights a week. They say my chance of obtaining one makes it no point in trying. Is this correct?
Sara (Debt Camel) says
which DMP firm?
yhe fact you are employed doesn’t matter – plenty of people with full time jobs get a DRO. Talk to a DRO Adviser.
Emma says
Hi,
I’m about to apply for a DRO.. I know I should open a new bank account with a different bank first (I’m currently with Barclays but around £1000 into my overdraft..) Do I have to tell a new bank that I’m about to apply for a DRO? Which banks would you recommend..? Also I read someone saying they had opened a basic account but the card couldn’t be used at petrol stations etc..?! Is that correct if the account is a basic one?
Many thanks in advance,
Emma.
Sara (Debt Camel) says
No, you don’t have to tell the bank you open the new account with. The new account will not be frozen when your DRO starts.
Pick a bank you don’t owe any money to. The new basic bank accounts that came in last year are very good – I don’t know how old the comment you saw was. See https://debtcamel.co.uk/bank-accounts-after-bankruptcy/ for information about this.
James says
Good evening,
I have submitted an application for a debt relief order through stepchange. I am waiting to see whether the DRO will be accepted.
My question is this: For one of the debts that I listed on my DRO application I gave a figure owing that was £20 more than the actual debt. This was an accident, as I when I was listing the debt I inadvertently reversed two of the digits. Will this affect my application? I am rather worried.
Many thanks.
Sara (Debt Camel) says
I don’t think this will matter at all. They want “accurate” numbers to check your debt total isn’t over the £20,000 maximum. If you have said £20 too high, that doesn’t matter. If you are worried, email the debt adviser who set it up, they will confirm this.
James says
Thank you very much for your quick response, and for putting my mind at ease. It is much appreciated.
Natasha says
Hi me and my partner are currently doing a debit relief order we are on benefits at the minute as I’m looking after our little girl I was wondering if it’s possible to get a part time job and if it will effect our debit relief order, we’ve got separate ones but one or two of the debits our joint
Sara (Debt Camel) says
If you start earning a lot, then this could affect your DRO…but it would also reduce your benefits as well. When your DROs were set up, the adviser would have calculated a “disposable income” figure for each of you – do you know what that is?
Riza says
Hi I’m in debt of £11,000 ( credit card & catalogue) only in my name. Husband doesn’t know. If I apply DRO would he get notified/affected because of this? I don’t want him to know. :( and also can PayPal credit card can be included with DRO?
Thanks
Sara (Debt Camel) says
Hi Riza,
your husband isn’t told if you have a DRO but it is very bad idea to try to keep this a secret. There are a lot of things that could happen during the DRO year that mean you would have to tell him – otherwise you couldn’t explain to him why you can’t take a better job, apply for a PPI refund, increase your hours, why you don’t want to choose redundancy at work even though you would get a good payout, why you aren’t happy about inheriting money as your DRO will end etc etc. And it doesn’t just end after the DRO year, as your credit record is badly affected (just like bankruptcy or an IVA) for 6 years in all – so you will have to say no to a joint account or a joint loan. And even after 6 years it may crop up you ever apply for a mortgage…
these problems don’t mean that a DRO is a bad idea, just that trying to hide it is. I know it must feel very scary to think of telling him, but you can explain that you want to get a DRO – so you aren’t presenting him with a problem, but with a solution as well.
Your Paypal credit record will be included in the DRO.
Kate says
Hi
I am in the process of setting up a dro I have not paid the £90 fee yet. I have had to stop working due to my mental health I have been paid £1200 from my work and I will be getting a final pay in January. Should I wait and carry on paying my debts with this money? I’m afraid to call stepchange and explain incase I cannot go ahead with the dro because of this. After the payment in January I will only be getting £300pm and £0 spare after bills.
Thank you
Sara (Debt Camel) says
Talk to StepChange about timing your DRO. You are allowed to have some savings (assets worth up to £1000) when you start a DRO so you don5 hav3 to spend it all on your debts, better to start the DRO with a bit aof an emergenc6 fed in the bank.
Kate says
Hi Sarah.
Thank you for the reply, when I was working I was sending my partner £500pm with going sick and quitting my job I will be sending my partner £250pm if I send my partner a payment of £500 will they see this as a bad thing as I’m giving away money?
Thank you
Sara (Debt Camel) says
I think you need to talk to your adviser at StepChange who will have the full picture. Sorry, but there is no point in me guessing!
Emma says
Hi I am in the process of a dro. I am slightly confused on the wage increase part. Within my job I sometimes have to cover shifts at last minute due to being on call. I then record these on my timesheet as overtime and get paid. Will this affect my dro?
Sara (Debt Camel) says
You need to talk to the person setting up your DRO about this. If you know how much overtime you got in the last year, they will be able to say whether this would be a problem if you get around the same amount in the next year. If you have only just started getting this overtime, it might be better to wait a couple of months and see how much you actually get?
dannielle says
Hi, I am just about to pay the £90 fee on my DRO then it to be put forward so hopefully by the end of January.. I am now 6 months pregnant and hopefully will be receiving maternity off the government at £140 a week which is like £70 more aweek but will have higher out goings I will receive this only few weeks in to my DRO will this cancel my order.
thank you in advance
Sara (Debt Camel) says
If your only income is benefits, you will not have your DRO cancelled but you should still notify the DRO Unit of your additional income. You can check this with the advisor who is setting up your DRO if you want to be sure.
Good luck for the DRO & the new baby!
Julia Roberts says
Hello..my partner is going to be subject to a DRO very soon with debts all in his name. However I am currently taking our ex landlord to court for £5000 and was wondering if I win will the money go towards my partners debts or affect the DRO. …When applying for the order my tax credits have been taken into account as the amount we have coming in. Many Thanks for your help.
Sara (Debt Camel) says
If the tenancy was just in your name, this won’t be a problem. You could win the lottery and it wouldn’t affect your partner’s DRO. But if the tenancy was in joint names, I think he should talk to his DRO adviser about this now, before the case is heard. It may be best to postpone the DRO until after the case.
keith says
No, if the DRO is solely in your partners name, then their money or assets are of no concern, unless you have a benefit from them or receive any financial help from them.
marie says
had a DRO about 5 yrs ago. got my self in debt again….can i apply again?
Sara (Debt Camel) says
You can’t have another DRO for 6 years. If your debt is “consumer debt” – credit cards, catalogues, loans etc you could look at making token payments for the next year, see one option would be to try to set up token payments, see https://debtcamel.co.uk/token-payment-debt/.
If most of your debt is things like utility bills and council tax, I suggest you go to your local Citizens Advice and see if they could help you get some grants that help.
Jason says
Hi Sara
Question that I don’t see covered, I have approx 9k debt, around 4k of which only taken last month and wasted on gambling. Would I be rejected for a dro for this reason?
I also do work but feel I could reach the £50 restriction.
Thanks so much for running this site.
Sara (Debt Camel) says
No, you wouldn’t be rejected, but you may get a DRRO, a Debt Relief Restriction Order. See https://www.gov.uk/government/publications/debt-relief-restrictions-orders-and-undertakings/debt-relief-restrictions-orders-and-undertakings. You may well decide that you don’t care about any of those restrictions.
BUT if things were manageable before and it’s just the last mad month that is the problem, I suggest waiting a few months until things settle down, don’t rush into a DRO out of panic. So:
– Cancel the CPAs or DDs to all your debts,
– offer them £1 a month token payment (see https://debtcamel.co.uk/token-payment-debt/)
– read https://debtcamel.co.uk/gambling/ and take action that will make it harder for you to gamble or borrow more
– if you have borrowed from payday lenders, see if you can get the interest removed from the debts or even a refund, see https://debtcamel.co.uk/payday-loan-refunds/.
Jason says
Thanks Sara, I am going to wait a couple of months before deciding how to proceed. I understand if I go for a dro I shouldn’t treat any creditors with priority so will do the 1pound payment to all.
Does the OR investigate my partners bank statements? Just trying to work out if I reach the under 50pound Mark.
My partner has debts to so I pay more of a 75/25% on house hold bills.
Does OR check to verify there income and debt payments.
Thanks again.
Andy says
Hi Sara. I quit my job recently due to alcoholism I’m receiving treatment via the nhs, I owe just under 20k on credit cards . My girlfriend works and now pays for everything . We rent private and have son under two . I have no money or assets besides a car worth well under 1000. Would I be eligible for a DRO , considering I left my job voluntarily . Thanks for your time
Sara (Debt Camel) says
Yes you will be eligible -no one will even ask why you left your job, you are not “judged” on this.
Andy says
Thank you . I really appreciate your help . Great site .
C Smith says
How many months bank statements are needed when applying for a DRO Please. Thanks in advance
Sara (Debt Camel) says
It depends who is setting up your DRO – seeing bank statements helps them to complete your application. I wouldn’t expect it to be more than a month or two – if you don’t have them, tell your adviser and see what else you could produce with the information they need.
the Insolvency Service doesn’t ask to see your bank statements.
Anonymous says
Hello,i got a car on lease for three and a half years. I have only three more payments and will have to hand the car back as there is a £5000 final payment. I know you are only allowed a car valued at £1000,i don’t have any money for a car and need it for my work desperately as there is no means of transport and i start real early in the morning’s. Is there any way the dro company can help me out with this situation. I’m entering the dro in three months when i hand the car back. I am really worrying over all this.
Sara (Debt Camel) says
Sorry a lot of questions:
How much are you paying a month for the car finance?
Have you asked the leasing company how much it would be if you took out another lease on the car for three years?
How large are the debts going into your DRO?
How far is your work and have you looked at other options such as a moped if there is no public transport.
Who is setting up your DRO?
Anonymous says
I’m paying £182.00 a month on my car finance. I would not be allowed to lease that particular car out for another three years. I either hand it back and get nothing. Refinance the £5000 or take a new car out on lease,which i don’t think your allowed to do if i enter a dro. My work is nine miles from my home,a moped is not an option. CAB is setting up my dro.
Sara (Debt Camel) says
Well there are some other options. You could not make the lease payment for the next three months, increasing the debt that goes into your DRO (you didn’t say what the total is at the moment) and use that money to buy a very cheap car or a moped. 9 miles sounds quite manageable on a moped surely? It may not be a great option but you may have to choose between not great options.
Have you asked the financing company about a new lease on the current car? It should be cheaper than your current one if it is possible.
If you don’t get another car on finance, will you then have surplus income each month?
Anonymous says
Are you allowed to lease a car and still go on a dro?
Sara (Debt Camel) says
It is possible – you don’t own the car and never will so the value of the car per se isn’t going to mean you can’t have a DRO. But there are two problems – will the lender terminate the lease? and will you be allowed to make the payments? It is worth investigating and then discussing with your DRO adviser.
J.C says
Hi I’ve made enquiries and I believe I qualify for a DRO I have no cash to live on after I’ve paid all bills and credit cards so I’m using credit cards to make ends meet. Do I have to not use credit cards prior to applying for DRO ?
Sara (Debt Camel) says
Hi J.C.
the obvious thing is to stop making any payments to the credit cards and any loans you have.
If you didn’t make any payments to credit cards at all, only paying priority debts such as rent arrears, council tax and gas/electric, do you know how much you would have left each month?
JC says
My application hasn’t been submitted as yet. I am waiting for the paper work don’t have any disposable income, do I stop all payments from now? All direct debits. ? Only then I would have something to live on. I’m getting more confused the more I read. Sorry
Sara (Debt Camel) says
Your adviser should be able to explain this and go through each debt with you – it’s a good idea to talk to them about this. But broadly yes, you should cancel the DDs and CPAs and stop making any payments to loans and credit cards. Or you could offer them all the same amount eg £1 a month, but as your DRO should be set up in a couple of months this probably isn’t worth the hassle.
The important points are that you must NOT borrow any more, so don’t use your credit card, and yiu should treat your creditors all the same.
Bob says
Hi I am employed and have income, my wife who looks after our child, is not working she receives child benefit and child tax credit, does this need to be included in our household income?
Also can you contribute to an employee pension scheme, how much can this be, I currently contribute 4%. Will this be an issue if I apply for DRO? Thank you.
Sara (Debt Camel) says
Yes, benefit income is counted as household income.
You can contribute to a pension scheme, the amounts you are talking about sound normal and they shouldn’t be a problem for a DRO application.
M says
I have got a lot of payday loans and have used my cc in the last few months. I have got the DRO application pack but don’t know whether to send it off it its highly likely to get declined- help?
Debts also a lot of gambling debt
Sara (Debt Camel) says
Has the advice firm you are talking to said it’s highly likely to be declined? Or are you just worried? Gambling isn’t a problem for. DRO, it can’t be declined because of this.
One option is to to stop paying any of your creditors anything for a few months and then apply. It’s important from this point that you don’t borrow any more AND that you treat your creditors equally, paying them all Nothing or a Token £1 a month. (If you gave priority debts you can carry on paying them, talk to your advice firm if you aren’t sure.)
If you have used payday loans a lot, you could also use the next few months to try to see if you can get any refunds of interest from them? See https://debtcamel.co.uk/payday-loan-refunds/. If you get a LOT back you may not even need a DRO. If you get a bit back, talk to your DRO adviser about what to do with this money.
Natasha says
I’m applying for a dro done my budget form said I’m eligible if I’m self-employed and do my tax returns in April so the dro would start before or after I claim what would happen? What would happen with tax return ? Also my wages will be going up due to new job most likely 200 week need some advice
Sara (Debt Camel) says
Business Debtline would be good people to talk to about this.
Mark says
I have recently spoke to step change about my debts as I’m off work long term due to illness they have sent the application forms in the post to me , u haven’t sent them back yet but I have no money to live on and have been surviving on juggling payday loans for over a year can I take anymore out to survive
Sara (Debt Camel) says
No, you have to stop taking out payday loans – or any other sort of credit. Cancel the CPAa and DDs to all your lenders today – if you are concerned about any of them talk to StepChange but unless you have any priority debts you do need to stop paying any of them. Tell all the lenders you can’t afford to pay them anything and you are taking debt advice.
Then read https://debtcamel.co.uk/payday-loan-refunds/ and put in complaints to the payday lenders and ask for refunds of the interest you have paid. Do this for every payday lender you have used more than once OR who you still owe money to. But you have to have cancelled the CPAs first as these complaints can take months to sort out, so you need to get yourself in a position to you don’t need to borrow any more money.
Then I suggest you wait a few months and see how the complaints go. If your situation improves a lot you may not need a DRO! If it doesn’t, then complete the DRO application knowing that you haven’t borrowed any money very recently and you haven’t been paying your creditors anything so there won’t be any problems with the application.
Hajnalka Hernadi says
Hello,
If me and my partner have a joint bank account with overdraft besides all my loans and credit, does he have to be on the DRO as well (as this overdraft would be part of the DRO). He is self employed and we are worried it would affect his business (he is not making a lots of money with it but hoping to keep it).
Many thanks
Sara (Debt Camel) says
I suggest you and your husband talk to Business Debtline about this and your options, see https://www.businessdebtline.org/. Unless you can get your name off the joint account, your DRO would affect his credit credit record.
Jane says
I am about to pay my £90 for a DRO I’m on benefits & it looks like my income might go up to about £500 pm due to my son being disabled & claiming extra money DLA etc so does that mean I cant do it now even though it’s for him & in his name but I get it due to him being a child, I will be over the £50 allowance now also it has been suggested I claim PIP for myself due to being off sick, should I stop the DRO as will not be allowed it now as my income has gone up? Thanks
Sara (Debt Camel) says
Your son’s DLA should not affect your DRO – your household income has gone up but you can put down extra expenses for your son’s disability costs which cancel this out – talk to your DRO adviser and they will confirm this.
Chris says
Hi,
Hoped you could provide some advice.
Having struggled with my debts I sought information about a DRO. I first contacted step change at the end of January and decided I would look to proceed with an application. I have paid the £90 and have looked to submit the app but have been told it might be refused because I have spent on a store card recently. Will this be the case?
I spent £18 on a store card on 12th Feb and I spent £100 on another card in the middle of Janurary (which was before I even sought advice). Could this really effect my DRO application? Should I wait 3 months from the last spend before applying?
Thanks.
Sara (Debt Camel) says
I would be very surprised if your application is rejected but StepChange have to tell you that it is possible. Unless you are getting a lot of hassle from creditors (eg bailiffs?) it may be best to wait and be sure.
Chris says
Many thanks for the info.
To update, my DRO has been approved and I have received that info today.
Is this finalised? Or, Can my creditors still object? If so, within what time frame would that have to be?
Many thanks
Sara (Debt Camel) says
This is now final – good!
There is no set time period for creditors to object. At any time a creditor can tell the DRO Unit that you have additional debts or assets that would take you over the DRO limits, but that isn’t the case here.
vikki says
can i do a DRO if im retired?
Sara (Debt Camel) says
yes – it doesn’t matter whether your income is from a job, benefits or a pension, if you meet the criteria you can have a DRO.
vikki says
Thank you Sara, also where it says you should have roughly less than £50 left a month, does that include if the debts were being paid?
Sara (Debt Camel) says
The £50 a month is what you have left if you are not making any debt payments. But as I said talk to an advisor because they can make sure your expenses list includes everything.
Vikki says
I also have a credit card which is the same as my bank, there’s no way I can change banks so can i make a token payment to all my creditors and get the credit card paid ASAP then apply for a DRO?
Sara (Debt Camel) says
Do you have an overdraft? Paying off a credit card fast when you are making token payments to your other creditors is not a good idea – you need to treat all your creditors the same.
It is now a lot easier to switch banks than you may think – here are some good accounts to look at: https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
Vikki says
No don’t have an overdraft but I’d prefer if my husband didn’t know about the DRO and he will if we have to change banks. it’s a joint account
Sara (Debt Camel) says
Then you really have to tell him about the DRO. Because you have a joint account his credit rating will be very badly affected for 6 years after your DRO starts. It will be best if you open a new account with a bank you don owe any money to and take your name off the current account.
Gail says
Hi, looking to get a dro. I work full time and have about 60 pounds spare every month after all bills are paid. Would I be rejected for a dro as I have over £50 left each month ?
Sara (Debt Camel) says
I think you should talk to a DRO adviser who can look at this in detail with you – it’s quite easy for you to miss off some irregular expenses when you are thinking of what you spend. And if a DRO isn’t going to work for you, they can talk about what will. So I suggest you phone National Debtline or go to your local Citizens Advice if you would prefer face to face advice.
vikki says
Hi Sara, sorry to keep asking questions but id like to know all these things before i go ahead and do anything, with a DRO do all the figures just go on paper or do they need bank statements?
Is it best to stop making payments to the creditors before starting the DRO process?
How would I go about doing a DRO? And is there 1 company better than the other or are they all the same
Sara (Debt Camel) says
The adviser who sets up the DRO may ask to see bank statements but these are not part of the application and aren’t sent to the DRO unit. Nor does anyone look at your bank statements during the DRO.
It’s best to treat them all creditors the same. Typically that’s either not paying any of them or offering a token payment to all of them.
You need to go to a charity that sets up DROs. I suggest Citizens Advice (they set up over 50% of DROs) or National Debtline (if you prefer to do this on the phone). If you won’t qualify for a DRO, the adviser can help you look at your other options.
carl sean lewis says
Hello I am applying for a DRO and have given all my creditors that i am aware of and i currently pay them all token payments but i also have a catalog which is payed every month without fail and no arrears on it, its in my name but my sister uses it and pays me the money every month. would i have to add this to my rdo
Sara (Debt Camel) says
Yes it has to be included. Your sister needs to get her own account I am afraid.
carl sean lewis says
would my application be rejected on the basis i took out this credit in 2014 but have had my creditors alot longer
i havent payed the 90.00 yet iv just sent the application back
Sara (Debt Camel) says
No, definitely not. There is a minor problem because you have been paying them and not your other creditors but as your sister has given you the money for that I don’t expect this to matter.
carl sean lewis says
ok thank you so should i contact my cataloge and advise them now that im in finanial trouble and seeking help – should i mention the dro or not
Sara (Debt Camel) says
It doesn’t matter if you tell them about the DRO or not.
NB is this catalogue on your DRO application?
carl sean lewis says
no not at the moment but it will show on my credit file
Sara (Debt Camel) says
Then you need to contact your DRO adviser to say you have left this debt off. Don’t wait to be asked about it!
carl sean lewis says
perhaps i should let her pay it off and then apply for DRO ?
Sara (Debt Camel) says
Well that’s up to you … but why would you delay because of this? Talk to your DRO adviser about your options.
carl sean lewis says
Reason im thinking this is because there are some buy now pay later items on there that they might ask back
Sara (Debt Camel) says
Ak your DRO adviser – the adviser can check if these are HP loans (in which case there is a problem) or not (in which case there isn’t). There is a very good chance this isn’t a problem but that is what the DRO adviser is there for.
Kellie says
Hi
I am considering a DRO ( reluctantly) I had a small business , took out a load last October and opened a shop and circumstances have lead me to be in a position where I will no longer be able to pay .
The landlord won’t release me from the tenancy and is demanding the rent each month .
I have borrowed and sold everything I can and this month I can’t pay anything .
Will the tenancy effect an application , should I wait until it becomes a debt . I’m done as self employed but due to mental health problems I’m getting very little done and earning nothing.
Sara (Debt Camel) says
Hi Kellie, I suggest you talk to Business Debtline – they will be able to advise on the tenancy and a DRO. See https://www.businessdebtline.org/
Hajnalka Hernadi says
Hello,
I am applying for DRO. My son goes to an alternative school where I have to pay a monthly fee. Could I be rejected because he does not go t free public school?
Many thanks
Sara (Debt Camel) says
I am sorry that I missed this comment when you posted it. This sounds an unusual situation and I suggest you talk to a DRO adviser about why you feel it is essential that he goes to this school.
Leanne young says
Hi I’m currently waiting for my DRO to go through I’ve hit a few bumps along the way due to my debt adviser getting sick and having to chase up some reference numbers before we put it forward..I paid the £90 nearly a month ago but have to make some phone calls to get creditor reference numbers for my debt adviser I’m just worried these creditors will asks questions and hassle me about not paying them? Plus I have a phone contract which is due for its upgrade in August will that be affected once the DRO is through?
Sara (Debt Camel) says
No you shouldn’t get hassle from your creditors, just say you are taking debt advice.
“Due for phone upgrade” best thing is to keep same phone and switch to much cheaper sim only deal.
James rossi says
If I have recently left my job too personal reasons and I have earnt 44k this current tax year, but I no longer have a job and will have too get a job that pays around £250 a week before tax and have debts of around 14k and have monthly outgoings of £1400 and my partner gets tax credits an child benefit.
Also have 4 children would I be rejected for a DRO…..??
Thanks
Sara (Debt Camel) says
You won’t be rejected because you previously had a good job. You need to get started in the new job, establish what benefits then are and then talk to a debt adviser about a DRO. In the meanwhile, it may be helpful to offer all your creditors a token £1 payment see https://debtcamel.co.uk/token-payment-debt/.
JC says
Hi my DRO will be submitted next month, my car recently broke down at a cost of £130.00. My mum paid for the repairs as I don’t have the money and I need my car as I work in the community. I will be paying my mother back should I include the cost in my out goings? to my DRO adviser or will it be listed as a gift? Many thanks
Sara (Debt Camel) says
In a DRO all your debts should be included and they will be wiped out – so you can’t then list the payments to your mum as part of your expenses.
In practice there isn’t anything to stop you giving your mum some money if you have some spare each month – no-one polices what you spend your money on when you are in a DRO.
J Gray says
I’m looking into a DRO. If I have one set in place yet I already have a weekend away planned in August which is paid for by my parents will this affect the DRo?? And will landlords reject applications for private renting with a DRO on file? Thanks
Sara (Debt Camel) says
It’s best to avoid large gifts during a DRO. But if your parents are paying for the hotel/B&B directly I wouldn’t expect that to be a problem.
Having a DRO on your credit record is an insolvency marker, like an IVA or bankruptcy. It may well cause you to fail a credit check by a letting agent. If you can rent directly from a landlord this may not be a problem. Or could your parents be guarantors?
A COOPER says
I am looking at applying for a DRO.
My wife and i are on joint benefit claims.
After i worked out the household expendature it lsft £90.
Is this split £45 each for myself and my wife or is the whole £90 classed as my disposable income?
Any help will be appreciated.
Sara (Debt Camel) says
You need to talk to a DRO adviser about what your income & expenditure would look like, but a 50/50 split would be common. If your only income is from benefits, you will automatically pass the less than £50 test.
A COOPER says
Thank you i will look into it today.
Matthew says
I am looking to apply ASAP. I have a logbook loan on my car which is only worth about £500. Would this be included in the dro? If not, can I continue to pay it, keep the car which I need for work, and include it in my expenditure? Many thanks
Sara (Debt Camel) says
You will need to talk to your DRO adviser about this as the details really do matter here.
Assuming the logbook loan has been properly set up (that will need to be checked), then the lender is a secured creditor. If you need the car for work (that would need to be checked) then you would be allowed to count the loan payments as an allowable expense. As the car’s value is so low (that too will need to be checked) if the logbook loan ends during your “DRO year” then you would not have a problem because you become, again, the owner of the car. But your disposable income would increase then as you wouldn’t have to pay the loan anymore and that could mean your DRO is revoked (legal term for cancelled).
lily says
Hi. I had a DRO 7 years ago but i split up from my husband 2 years ago and he left me with credit cards that he ran up in my name. I have managed to clear £3000 of them but im struggling with the rest which are totaling £12000. Will i be able to get a DRO or not. Thanks
Sara (Debt Camel) says
You can get another DRO as our first was more than 6 years ago.
A COOPER says
Hi Again
I am going to apply for a DRO but i have a question about paypal.
I had a paypal cash advance which i can no longer pay as i no longer work.
I have also been told there might be 2 chargebacks on their way from buyers who had viryual goods and now are saying they did not recieve.
If i add paypal to a DRO and the initial debt to them goes up once the DRO is granted will it also cover those debts?
Thanks for any help you can give.
Beth says
Hi there, I am seriously considering a DRO after a relationship breakdown 2 years ago had left me independently renting a two bedroom house in London (we share a child) and debt has just spiralled more and more. I have done income and expenditure with a debt charity but not taken it further yet. I have some questions I would appreciate if there are any of them you could answer-
1. Do you know of anyone who has been able to privately rent whilst on a DRO? If I move flats, which is likely, obviously my credit rating would say I am insolvent and I am not completely confident I could get a gaurantor- what would happen during a credit check if it was after the first 12 months of the DRO? This is a very big worry. I know they do a fairly soft search but with the insolvency part I do wonder how long it would affect me getting a different flat.
2. Does every DRO Advisor generally need bank statements? Mine would show that I have made transfers to and from myself from another bank account. That is because it is money that is sometimes gifted to me from my parents and is not income. How would this affect things?
3. When they look through the bank accounts what kind of things do they question you on? Thanks.
Sara (Debt Camel) says
Getting a new private tenancy with any sort of insolvency on your credit record can be hard if you don’t have a guarantor. It’s not impossible – sometimes you can find someone who will rent to you directly not using a letting agent for checks and it can help if your previous landlord will give you a reference. But if your debts are out of control, that can also make it hard to pass a credit check.
Most DRO advisers look at bank statements. But gifts from your parents are not income and they shouldn’t be a problem. Debt advisors are looking for a picture of your income and expenses and also for any payments to debts to check the debts are all listed on your DRO application.
Helen says
Hi Sara,
I am just wondering what access the IS/OR needs or has to my bank?
Wanting to change bank accounts (as having awful trouble with current bank) but I didn’t know if I had to remain with the same main account I had when I submitted the DRO in order for the OR to access my finances and see how things are going? How do they know I’m in the same position at the end of the 12 month period as I was when I applied for the DRO if I don’t have the same bank?
Many thanks!
Sara (Debt Camel) says
They don’t need any access at all and there are no checks at the end of the DRO. In the very unlikely event of the OR asking any questions (perhaps someone had reported you saying you had received a windfall) you could get your bank statements from your previous bank if that was necessary. So go ahead and change banks!
Helen says
Thank you!
Didn’t want to upset the IS/OR or risk anything!
Your advice is as invaluable as ever!
Bex says
I’m looking at getting a DRO, my debt has spiralled out of control and i’m so ashamed. I have just managed to keep up to date with debt payments, but this will change next month when I the money I saved up for on loan runs out and I have to start paying half the rent to my partner, which would mean I wouldn’t be able to pay my other creditors either.
Will my application be rejected because i’ve managed to keep up with payments so far? Thanks.
Sara (Debt Camel) says
Well you can#t apply until you have reached the point where you can’t pay your debts, so you couldn’t put in an application now saying you will be in trouble next month. But once you apply, it won’t be refused because you were recently paying the normal monthly payments.
One thing to be careful of is that you treat all your creditors the same. Now would be a good time to talk to a debt adviser about a DR), you don’t have to wait until next month.
Christine Birkitt says
Hi I’m going to pay my DRO on instalments do I have to wait till the whole £90 is paid before things start to move forward
Sara (Debt Camel) says
Your application won’t be submitted until you have paid it all, but the application can be prepared whilst you are saving up so it is ready to go.
Sarah Cowle says
Hi, I was hoping someone could help me. My husband and I are on the verge of going through a DRO, we have completed our budget. But my husband is due to start a new job at the end of June, we don’t know what his monthly pay or hours will be and there for can’t budget based on what his new wage will be, and reading this has made me nervous that it may take us over the limit but I’m not sure.
What am I best doing?
Kind regards
Sarah
Sara (Debt Camel) says
You should talk to the adviser setting up your DROs about this. It may be better to wait a while until his pay is known – that may also affect any benefits you get? But your adviser may be happy for your DRO to go in now?
J Holt says
I have a few debts including a paypal merchant cash advance. Can i put paypal on a DRO ?
thank you
Sara (Debt Camel) says
yes you can.
J Holt says
Thank you Sara
Silly Billy says
I was in council tax arrears before my partner moved in. When he moved in we notified the council so that the single persons discount could be stopped. They have added my partner to the council tax account.
I want to include the council tax arrears in my DRO but the council are saying they will be passed to my partner. Is that possible? He is not liable for debt I accrued before he lived there surely?
Sara (Debt Camel) says
That doesn’t sound right to me! If there were arrears on the current arrear, yes he would be liable to for the full amount. But he isn’t liable for council tax when he wasn’t living there. I suggest you talk to the adviser setting up your DRO who should confirm this.
Karen Burton says
I have recently applied for a DRO and checked the insolvency register and my name is on it does that mean it’s been approved?
Many thanks
Karen
Sara (Debt Camel) says
Yes!
Keith Gilbert says
Hi, I am profoundly deaf, a carer for my Mother & receive Carer’s Allowance, Income Support as well as DLA.
I am applying for a DRO with my local CAB & we found out my car is over the £1000 threshold. I pointed out that I relied on my car for getting to & back from hospital appointments for both myself & my mother as well as traveling elsewhere in it (Bracknell to Birmingham quite often) Because of this I have to have a reliable car, currently my DLA is not high enough to allow for a mobility car.
On top of that I am suffering with ongoing joint & back pain that I am being seen for but is getting progressively worse as time goes by,
I can’t use public transport due to my disability, I’m deaf but have facial disfigurements due to Treacher Collin’s Syndrome & find it very difficult being in public due to anxiety & severe lack of confidence.
After getting valuations we were quoted £1400 as my cars value so I had to sell it before going ahead with the DRO. Having just sold my car for £1275 (but offer after trying to sell it for ages) & having savings of approx £800 in my bank, will this be an issue when applying for the DRO? Also what do I do to provide proof that I sold it etc?
Also, if & after the DRO is approved I will really need to sort getting another car but will be looking at paying £1500-ish for one with my mother’s help. Again this is down to needing a reliable car. Will this be an issue?
I would ask my advisor at the CAB but as he’s so busy at the moment getting to see him takes awhile & we can’t speak over the phone due to my hearing issue!
Sara (Debt Camel) says
I am sorry but you do need to speak to your advisor about this – I don’t know what he suggested to you but you need a plan for what to now (as your assets are now too high for a DRO) and how you will get a car with the help of your mum.
Keith Gilbert says
Okay, thank you anyway.
Lavern Warren says
I’m applying for DRO I also wants to do be a register child minder at home can I do that with DRO in place. Thank you
Sara (Debt Camel) says
I have never heard of this being a problem. You will need a DBS check (for a criminal record) but so far as I know you don’t have a credit check.