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
Jhon says
Hi sara
On Thursday my DRO will finish the 12 month period
I am very sorry and happy
Happy is finished
And worry if anything goes wrong
My question is if there is any problem do you think the IS will be kintouch by now ?
Or should I start planning a new chapter in my life
Thank you
Sara (Debt Camel) says
Nothing happens at the end of a DRO. No one checks your bank accounts. It’s natural to worry but things don’t tend to just pop up at the last moment. Two days, I will be thinking of you.
Jane says
Mine also ends on Thursday and I have the same worries – is there a set length of time after a DRO finishes that they can contact you if have been any issues?
Sara (Debt Camel) says
No but it is INCREDIBLY RARE for there to be any issues after a DRO ends. This is not something you need to worry about. The insolvency Service would have to go to court to take any action. More than 25,000 people a year have a DRO and my guess is only a couple of cases a year have any problems afterwards.
Jhon says
Hi sara
Thank you
So basically do think after the 2 days I am free to try and get better paying job or a better my life?
Jhon says
Good morning sara
Today is the end of my DRO 12 months period
I know I free from all debt listed
I was wondering if I have to stick to 50 pound rules or do I have any restrictions?
Thank you
Sara (Debt Camel) says
There are no more restrictions on you at all. You no longer have to report income increases or getting a bonus, winning the lottery or inheriting anything.
Your credit record remains badly affected for another five years.
Jhon says
Hi sara
I have checked with the IS register And I am pls to say my DRO 12 months period is up .
I am very happy and relieved
I would like to take this opportunity to thank you from the bottom of my heart. You have been a great help so thank you again
naga says
hi
I had issues on lone my husband pay by DMP FOR 10 YEARS, DMP say now apply DRO, but I am sick , when I got issues 2010, 2011,2012 ….2018
I give advice for DMP, My husband ask them last year, then they agreed, but I don’t like DMP 10 YEARS my credit file is good, if I go DMP again
my credit fill will affect again 6 years, this is DMP COMPANY mistake. they will sort it out ?? please advice to me ?
thanks
naga
Sara (Debt Camel) says
I replied to your previous question about what to do here https://debtcamel.co.uk/prove-it/comment-page-2/#comment-330422
I don’t know if you would have qualified for a DRO before. I don’t know what you told the DMP company – you may have been expecting your situation to improve in which case a DRO previously would have been a bad idea. have you asked the DMP company why a DRO was not recommended before?
I think your credit record is not the most important thing here. You are unwell. A good credit record so you can borrow again seems less important than removing the stress of this debt.
Craig says
Hi I have 2 bank accounts one of them is in my overdraft limit and the other is 800 in credit. I was putting the money aside to pay rent as I am going in hospital for a kidney transplant. I went to the bank and the bank have frozen both my accounts. Will I get my money back or as it gone for hood
Sara (Debt Camel) says
Did your adviser not tell you to open a new bank account with someone you don’t owe any money to?
You won’t be allowed to keep an account with an overdraft.
I suggest you talk to your DRO adviser about your options.
Sarah H says
Does the “£50 test” include the repayments you are making on your debts? If I make all of my min repayments and pay my normal household bills I have about minus £185 a month, which obviously isn’t do-able so I am paying less than the minimum payments on a lot of them. However, if I didn’t make any debt repayments I’d have a lot more than £50 a month leftover. Does that mean I wouldn’t be eligible for a DRO?
Sara (Debt Camel) says
“Does the “£50 test” include the repayments you are making on your debts?”
No, it is assuming that you don’t make any debt repayments.
But you may be allowed more for your expenses that you are currently paying so it is possible you could then be under the £50.
Are you working?
Sarah H says
Yes I’m working and I earn quite good money. It’s my debt repayments that are the problem. Without them I’d have quite a good disposable income. I owe less than £20k but my repayments in total come to about £800 a month. Does that mean a DRO isn’t suitable for me?
Sara (Debt Camel) says
Talk to National debtline, they can look at whether a DMP or a DRO will be more suitable for you.
Julie Colquhoun says
Hi my dro had just been sent off after paying my £90.00. I bank with natwest i only have a basic account with them. Will they be informed and do i need to open a new bank account with someone else.
Sara (Debt Camel) says
They will be told if you owe any other debts to them or another bank in the same group, eg a credit card. Some banks also run regular chekcs on accounts holders so it’ possible this could show up later. If you want to be sure, you need to ask NatWest. I would be surprised if your account was closed but you may decide it’s a good idea to open a new basic bank account with another bank just in case. Wait until your DRO has been approved before you do this!
Paul says
Good evening. I have just had my DRO accepted on the 11/12/2019. My UC payment on the 15/12/2019 still had DWP deductions which were included on my DRO. Will the reduction be paid back to me?
On the same note, my DRO took a while to be accepted, due to me having several open applications for some reason. As such I have been paying back the repayments from my UC. Since I have included all my DWP debts on my DRO, will I be repaid the repayments I have made to the DWP?
Cheers. Paul
Sara (Debt Camel) says
Have you told UC that you now have a DRO?
The DWP deductions should be repaid to you. If they aren’t, then the debt adviser who set up your DRO will explain how to appeal this to the DWP.
I haven’t come across the issue you mention about your DRO being delayed, it sounds unusual. I doubt the previous deductions from your UC will be repaid, but discuss this with your DRO adviser.
Paul says
Thanks Sara. I have contacted the DWP and have been refunded. They did add that it was advisable to contact DWP payments and Debt Management (if you had debts thst were included in the DRO) to make them aware and avoid such underpayments. Just to advise as the DRO literature I had informed that all debtors would be nafe aware of your DRO.
I will also contact my DRO agent about the delay. I have kept all the emails regarding my application. I have asked by email previously that someone contact me to discuss but I just received emails asking me to contact them and when I did they were no more aware of the issue.
Thanks also for your quick response.
Cheers
Paul
Elizabeth says
Hi,
I recently got a DRO granted but lost my job 4 months after. I was looking into self employment but I remember that you have to have permission. Do I have to do this if it would my only income? How do I tell them about my employment ending?
Thank you
Liz
Sara (Debt Camel) says
You can’t be a director of a limited company in a DRO without getting permission from the court – is that what you are thinking of? I don’t think you have a problem if you want to be a self-trader, but the best people to talk to about this are Business Debtline https://www.businessdebtline.org/EW/pages/default.aspx – they are the experts on debt and the self-employed.
Elizabeth says
Thanks. I contacted my dro advisor. They said as a sole trader I am fine so long as my earnings stay in the bracket of no more than £50 spare per month. Which it won’t for a long time.
I can’t make my business a limited company which you are right about, that makes sense.
I can move forward with my life and new outlook.
Sara (Debt Camel) says
Good news – I hope the new business and 2020 go well for you.
Joseph says
I have been gra Ted a DRO but I made out I lived on my own and estranged but my wife lives with me and earns a full time salary plus child maintenance and family allowance. A creditor has told the or so what will happen now. Will they revoke my dro or ask for evidence. Can I still lie and hope they dont look into it.
Sara (Debt Camel) says
I don’t know what the OR will do in your case.
You should tell the full truth from now on. To lie would be criminal offence, not just a civil one, so potentially you could be prosecuted, get a criminal record and even be sent to prison. That’s very rare – not a risk for anyone who has accidentally left something off – but deliberately lie now and it’s a risk.
Elizabeth says
You actually didn’t need to lie as they wouldn’t have forced your wife to pay your debts. It’s just a check.
I would contact your debt advisor and speak with them. It may be that your expenses for the month would still have fallen into the correct bracket.
Your wife could even have done one for herself of she was struggling too
Tracy says
My ex husband did this when we were together. He kept trying to lie but it made it worst. The o.r started to investigate everything and he was prosecuted in the end. All he had to do was admit he had lied immediately and the o. R would have just revoked the DRO but cause he tried to keep lying it made it worst. The local furniture store reported him, not all creditors will report you but if they’re local and see you about they will.
Stacey says
Hi,
I spoke to StepChange today about entering into a DRO, originally I was applying for an IVA but after doing my budget I have under £50 spare a month and therefore have been advised a DRO is the better option for me,
I am waiting on paper work that I have to send back with my bank statements etc, they have advised it may take 8-10 week for the DRO to be set up and accepted from this point, is this normal? As my credit accounts have only placed a 30 day hold on my accounts and I am worrying about this
Sara (Debt Camel) says
Yes it’s normal. It feels like a long time, but it doesn’t really matter that it is longer than this 30 day hold. Nothing your creditors can do can be a problem at this stage unless you have notifications about bailiffs, where it is vital you do not let them in. If your debts are much earlier stage, then you miss a few payments, you will get some cross letters and texts. StepChange can talk to you about any you feel very stressed about.
Feri says
Hello!
I have debts of around £24,000 with all interest frozen. Haven’t paid a penny to any creditor since 2016 but have always maintained correspondence with all creditors.
I have no assets whatsoever. I was out of work for three years but I’m now working and earn around £22,000, and with all expenses and income considered I have around £150-£180 spare each month.. would that stop me from starting a DRO? And what alternatives are there for someone in my situation?
Many thanks
Sara (Debt Camel) says
If your debts are more than £24,000 that rules out a DRO.
One option for you would be a DMP, but at that rate of payments it would take a very long while. It could be a good option though if you expect your finances to improve?
If you expect them to get worse, it may be sensible to consider bankruptcy now. Talk to National Debtline on 0808 808 4000/
Feri says
Thank you, Sara. Appreciated.
I expect my finances and situation to improve, but I fear that I may be locked into paying back my debt for many, may years to come. I’m not averse to paying the debts, so I may consider full and final payments/settlements.
Thank you,
Feri
RJ says
I just had my DRO granted. One of the creditors wrote to me saying: we received info from Insolvency Services about your DRO so now we’ve written off the balance and closed your account. Does that mean they cannot claim on this debt in the future? Even if my DRO fails the 12months moratorium period? 🤔
Sara (Debt Camel) says
Sounds like it! But let’s hope your DRO goes through smoothly.
RJ says
Yes! I hope so too! Early days, only have had DRO since 29th January.
Thank you for a swift reply and may I thank you for this amazing website? Mainly because your knowledge and advice I was finally strong enough and wise enough to tackle my debts!
Very grateful :) thank you!
Stacey says
I have been advised not to put my DRO Application in if I have used any of my credit cards or catalogue accounts in the last 3 months, I used a credit card £30 on Christmas Eve, should I wait before I put in my application?
Also I have been told StepChange are sending me the payment letter next week how long from me lying my fee will my DRO application be put in? Thankyou
Sara (Debt Camel) says
StepChange are the best people to ask about this. Have you been sent a copy of your completed application form?
Stacey says
I am being sent it this week, have been told I will recieve by next Friday with the barcode letter to make payment if this is what you mean?
Jennie says
Hi
Does the official receiver look at your budget sheet? My auntie is severely depressed and goes to a counsellor once a week costing £25 per week. Would this be classed as excessive?
Sara (Debt Camel) says
Your auntie is thinking of a DRO? She needs to talk to a debt adviser. Is she in work or reliant on benefits?
Michelle says
Hi, I was with an energy company who went bump last January and I was automatically put with another energy company. I have paid all bills up to date, but they are now saying i owe £490 to previous energy company and threatening me with Debt Collectors. I have written complaint letters but they are ignoring them. I am 6 months into my dro. I dont know what to do. I dont even think I owe this money otherwise i would have included it in dro. Can they pursue this without evidence that i owe it? I have asked them for evidence but they ignore my letters/emails. They just keep sending me an overdue Bill. Can they even claim on behalf of another company? Stressing me out.
Sara (Debt Camel) says
I suggest you go to your local Citizens Advice for help with this.
Michelle Foster says
ok, thank you.
Bonita says
Hi does child maintenance classed as income when applying for a DRO.
Thanks
Bonita
Sara (Debt Camel) says
Yes it is.
Rachael says
Hi Sara,
Do you know if on a DRO and you have a car on hire purchase, Do you have to class the car additional debt or can I just keep paying the monthly as normal so that I can keep the car to commute to work. There are no missed payments but I don’t really want to stop paying them as this would then take me well over the £20,000
Also do you have to change bank accounts with a DRO or can you keep the same account if you don’t owe the bank any money?
Thanks in advance…all the post have been really helpful – was just unsure about the cars hire purchase agreement and whether it’s considered a deficit or if I have to make it a debt by defaulting or handing it back?
Thanks
Rachael
Sara (Debt Camel) says
A HP debt that is in arrears has to be included as a debt in a DRO application.
If you aren’t in arrears it gets complicated… not just because of what the Insolvency Service says does but because there may be a term in your HP contract which allows the finance company to terminate it if you become insolvent (bankrupt, IVA or a DRO). I suggest you talk to National Debtline on 0808 808 4000 about your full situation including the car finance.
Rachael Mackey says
Thanks Sara, I’ll check with them and dig out my paperwork too!
Thanks for getting back to me,
Rachael
Liz says
I was also told during my dro that if my car was worth over a certain amount I would have to sell it as its an asset that could be used to pay creditors. I can’t remember if it was £500 or £1000 it had to be under in value
Sara (Debt Camel) says
yes but that doesn’t apply to a HP car as it is owned by the finance company, not you.
Liz says
Ah they didn’t say this to us! That’s good to know thanks.
Luke says
Hello, if my DRO ends on the 20th of July, can I start a new, high paying job on the 1st of July, without it affecting my DRO? I think my first wage will be on the 1st of August.
Thanks
Sara (Debt Camel) says
Sounds OK but pretty close… talk to the debt adviser that set up your DRO as you don’t want to get this wrong by a few days.
jean says
hi im currently in contact with step change on behalf of my son and his debt .. they have suggested a dro his overall debt is around 8000 the question i want to ask is he is an agency worker and his income is inconsistent … hence the debt .. at the moment he is on universal credit will this inconsistency with his income affect the application or decision with the dro his work pattern changes all the time … how will that work if he has a dro.
Sara (Debt Camel) says
He really needs to talk to StepChange about this. Looking at how his income and UC have varied over the last 6 months can give an indication. StepChange won’t put his DRO forward if they don’t think it is suitable.
Stephanie says
I have just had a dro approved (14/2) but have now realised I dont qualify as I didnt state that I may have a share of a old cottage in Greece. My ex husband was supposed to transfer into my name as part of my divorce settlement but he has refused to do so as he cant afford it! I didnt include it as it is abroad but have since realised this was bad advice. I know I need to notify the Insolvency Adviser but am worried what they will do. Will I be prosecuted. I am also assuming the DRO will be revoked? My debts amount to £19k so will need to find another solution. I should add thst i suffer with mental health and have a chronic illness
Any advice will be appreciated. Thank you.
Sara (Debt Camel) says
“have since realised this was bad advice. “
who told you this?
Yes you do need to tell the Insolvency Service and your DRO is extremely likely to be revoked. In general, prosecution is less likely if someone explains promptly when an error has been made, but I cannot say what will happen in your case.
I suggest you talk to the debt adviser that set up your DRO about your other options.
Amy says
Hi I was wondering if my DRO is rejected how long before or even if can I apply again for one? Thankyou
Sara (Debt Camel) says
Why would your DRO be rejected? Are you in the process of making one?
Stacey says
Hi, I had my DRO accepted today, on the letter my water bill is included as a debt (I get a quarterly bill), my question is do I still pay my monthly water instalments? I dont want to fall behind with my household bills but also don’t want to put my DRO in jeopardy, Thankyou
Sara (Debt Camel) says
The best thing is to talk to the adviser who set up your DRO – it depends on whether arrears or the current bill was listed in your DRO. In general if a debt is included in your DRO you should not pay it. But future bills from the same firm are new debts. This can be confusing for utility bills and your adviser would rather talk to you to make sure you get it right.
Stacey says
Thankyou! I’ve phoned StepChange who advised as it’s not arrears and just a bill as such I should continue to make my monthly payments and it won’t effect my DRO Thankyou
Sara (Debt Camel) says
It’s good to know!
Emma says
Hi
My husband is in the process of applying for a dro, he has around £5000 debt. He has been told to included his car which is on hp in the dro as there is still £6000 owing.
If a family member were to purchase him a car for under £1000 within in the 12 months of the dro would that be ok?
Also if our bank statement doesn’t match entirely to our written budget eg ; we wrote down we spend £500 on food but on bank statement it’s less for that month, is that a problem ?
Thanks
Sara (Debt Camel) says
Hi Emma,
are you saying he he is going to hand back the car and the family member would buy him another one as a replacement?
Emma says
Hi Sara
Yes that’s correct we’d hand the car back and the remainder of the finance would go into the dro.
A family member has said they would purchase us a car under £1000 once the dro has been accepted.
Thanks
Emma
Sara (Debt Camel) says
I hope he has talked to the adviser setting up his DRO about the car going back?
He is allowed to own a car worth up to £1000 in a DRO. The kind family member can give him a car worth less than that. Or they could give you the car, then it wouldn’t matter what it was worth. Or they could keep legal ownership of the car and let him drive and insure it, then it wouldn’t matter what it was worth. His debt adviser will explain all these options to him. It really is best that the debt adviser knows everything about the case – I can only give generalities but it’s good to get it confirmed exactly what applies to him.
Emma says
Yes the advisor advised him to add the car to his dro as it’s value is over a £1000 so he said it could of been complicated.
Could I also ask what they generally check with the bank statement? As I said I was concerned if that particular month it didn’t match the expenditure budget I gave them.
Sara (Debt Camel) says
It’s up to the debt adviser what they want to check before submitting a DRO. The insolvency service doesn’t ask for bank statements to check the application.
Tom says
Hello
I have had a dro since June/July last year
I’m kinda scared cause completely my fault I just moved house and put my head in the sand
I have had a job at currys since September paying inbetween 800/1200 a month
But I have only just found out I had to declare it ASAP but obviously I’m 6 months in now I have just been trying to ignore the world I’m autistic so handling things aren’t my forte
I am just scared because I’m so far in I don’t know what to do ☹️
Sara (Debt Camel) says
Talk to the debt adviser that set your DRO up. A new job often doesn’t leave you a huge amount better off if you lose some benefits. Yes you should have done this earlier, but get right on it now!
Adt says
Hi,
Please I need some advice. I have been living with debts for some years ,now got worse and I ended up taking credit to pay another debt. I cannot live like this anymore as I have a 1 year old baby. The problem is that I had a guarantor loan and my mother in law gaved me money as gift to pay off this loan as she was the guarantor and I also buyed some items from my store catalogue, all this in the last 2 months. Forgot to mention that I live with my partner and he works and earn pretty good, but he also is the one that pays everything (rent, bills ,food etc.).
Looking for debt solutions I found DRO…
Can anyone give me advice, can I be refused DRO in the situation I am? Thanks.
Sara (Debt Camel) says
Here I am assuming you meet the normal DRO criteria. I think you should talk urgently to a debt adviser about this, you don’t want to proceed assuming you can get a DRO and then find later you can’t, so phone National Debtline on 0808 808 4000 for advice about this.
You MIL giving you the money to pay the guarantor loan should not be a problem for a DRO. You will have to explain what happened to the debt adviser that sets up your DRO, but this was not you CHOOSING to repay the guarantor loan rather than your other creditors the Money was only given to you for that purpose.
Re buying things from catalogues, you need to stop that now. And either stop making any any payments to your debts or just offer them all, no exceptions, a token £1 a month. If you do that for a couple of months you can then apply for a DRO.
BUT you may have one alternative… do you know how much interest you paid to the guarantor loan? That’s the total of all the payments you made including the final settlement less the amount you borrowed. And how much do all your current debts add up to?
Adt says
Hi, I qualify for DRO. The total of my debts is around £15k. I can’t afford to pay as I don’t work anymore ,but I don’t know how to stop paying and give them £1, I am scared. I always paid my debts on time ,never had a missed payment. What should I do, cancel my direct debits and call to tell them I’ll only pay £1? The things I bought from catalogue were already on a credit limit I had from long time, I havent applied for credit now…
Sara (Debt Camel) says
The total debt limit isn’t the only criteria for a DRO. I suggest you talk a debt adviser now to make sure you are going down the right path for you.
What should I do, cancel my direct debits and call to tell them I’ll only pay £1?
yes. Or email/message them. Or just cancel the DDS and when they contact you talk to them and offer £1 if you would find that easier. Say you will be taking debt advice.
Rushon says
Hi,
What checks for the insolvency service do during the 1 year momentary period.
Will they know if my income changes or I change jobs?
Sara (Debt Camel) says
You have a duty to inform the Official receiver if your income increases. It is a criminal offence not to. See What happens if you don’t tell the official receiver? in this article: https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/debt-relief-orders/while-a-debt-relief-order-is-in-place/your-circumstances-have-changed-debt-relief-orders/.
Luke says
Hello,
Can I buy a second vehicle while on a DRO? It’s with the intention of selling the first one as its got problems in the engine. But I will own the two for a short time.
Sara (Debt Camel) says
Has your DRO started? How long ago? What do you think the current one is worth – anecdotally second hand car prices have collapsed in the last two weeks.
Mr Luke Jones says
Interesting.
My DRO started last September. The current vehicle is now worth little, say £300?
Sara (Debt Camel) says
well you are allowed a car worth up to £1000 and assets of up to £1000. So unless you had a lot of assets at the start, you may be OK – talk to the Debt Adviser who set up your DRO about this.
Emma says
How many months bank statements do you require for a DRO application. Last month I was paid two large amounts for back dated DLA and carers allowance claims will this stop me getting a DRO
My only income is UC, DLA and carers allowance I don’t work
Many thanks
Sara (Debt Camel) says
Getting these back dated lump sums by itself won’t affect getting a DRO. What matters is how much money you have in the bank and, if you have spent it, what you spent it on.
You can have up to a £1000 in the bank when you have a DRO. If you currently have more than that, then I would say top priority is to repay any rent arrears if you have any? Are there any essential items around the house that are needed – very old washing machine? New mattress? Kids need new shoes? Keep receipts for things.
Don’t start paying off a few debts (except for rent arrears) without checking with a debt adviser first as this may be “preference” and stop you getting a DRO.
Lauren says
Hello,
I’m currently a student nurse who is being called to provide help during the COVID 19 outbreak- this will be paid meaning that I am above the £50 a month allowed with my DRO. It ends at the end of July. Who do I need to inform of the changes to my circumstances and is it likely that my DRO will be revoked due to the increase in income? Although it’s through a pandemic.
Thank you.
Sara (Debt Camel) says
Hi Lauren,
First 👏👏👏 thanks for all you and your fellow student nurses are doing.
Can you say who set up your DRO – which debt advice agency, not the name of the adviser?
How large were the debts in your DRO?
Do you have any idea how much you will be earning in a month? And is this temporary or have your student days ended and you have graduated early?
Lauren says
Hi, thank you!
It will be continuing until I qualify in September but my debt relief order will be finished end of July.
The debts are around 14,000.
CAB set up the debt relief order.
I will be receiving over £1,000 a month.
Thank you for your reply.
Sara (Debt Camel) says
ok, so I think you should go back to the adviser who set up your DRO and ask for their help to contact the Official Receiver.
You may have some extra expenses because of working but it seems likely that you will be left with much more money thatn you expected.
The Official Receiver has in threory a lot of discretion about revoking a DRO. I would hope that given you are helping your country by doing this job – you didn’t just choose to do it for the money! – and because your DRO is so close to the end, the OR may decide it can be completed, not revoked.
Stacey says
Hi,
My DRO began in March, I set it up through StepChange as my spare money each month was £32,
With the COVID-19 my universal credit is going up next month by £1000 for the year (£83 a month) is this going to affect my DRO? Or would I be able able to change my whole budget etc as it’s going to be costing me more as my children are off school etc.. Thankyou very much :)
Sara (Debt Camel) says
The DRO unit has said you don’t need to inform them when your UC goes up :)
Do you get council tax support? if you do, contact your council as you should get an extra £150. You don’t have to tell the Insolvency service about that either .
Stacey says
Oh lovely! Weight off my shoulders Thankyou!
I do, I’m on full UC with 2 children, and get council tax support I haven’t seen anything about the council tax support going up, where would I find this info?
Thankyou so much for your help
Sara (Debt Camel) says
See https://www.rightsnet.org.uk/welfare-rights/news/item/government-issues-guidance-to-local-authorities-on-500-million-council-tax-hardship-fund and ask your local council about this.
MARIE says
Hello,
I was about to apply for a DRO. I am over £20,000 after not paying credit companies for a year due to unemployment. Can I still apply, providing I can get my parents to help out with one of the debts? And will the application take longer to process due to the current climate?
Sara (Debt Camel) says
Did you not ask for interest to be frozen on your debts? Is interest still being added?
How much over the 20k mark are you?
DROs are still going through but they may be a bit slower. Also they normally take 8-10 weeks.
EDIT The DRO limit changed in June 2021 to £30,000.
Khan says
Hi Sara, it is great to see all the support you are providing on here. I am applying for a dro at the moment through step change. Me and my partner are on UC and as we had a advance, I have been told to include that in my total debts, but as the advance was taken in a joint name, I have been told that my partner will still have to continue paying off the full amount of advance as well. Im confused if the advance is going on my dro then surely she doesn’t need to continue paying the full amount as well, it’s like I’m paying for it and she is going to be paying for it as well. Any help will be appreciated. Thanks.
Sara (Debt Camel) says
I have been told to include that in my total debts
that is correct
as the advance was taken in a joint name, I have been told that my partner will still have to continue paying off the full amount of advance as well.
That is also correct.
it’s like I’m paying for it and she is going to be paying for it as well
That would be wrong, but you AREN’T paying it.
This is a joint debt and both of you are liable to pay the full amount.
If your partner also has a DRO, then neither of you will be paying it.
Khan says
Hi Sara, thanks for the reply. Also my debt is very close to the 20k mark. Do the dro team double check the debt figures from credit file or agencies etc before submitting the application to an insolvency team? Thanks.
Sara (Debt Camel) says
The adviser who submits your DRO will want to check the amounts are correct. Is interest frozen on any of your debts eg credit cards?
EDIT The DRO limit changed in June 2021 to £30,000.
Khan says
Hi, okay great, I called some of the companies I owe and was told the debt was frozen and no further charges will be added. More than half of the debts are with debt collection agencies and as far as I am aware they dont add any extra charges or interest. So I’m hoping the dro suffices for me as I cannot afford to pay for a bankruptcy.
S says
Hi,
I understand with a DRO I’m not allowed assets
I have 2 years no claims discount on car insuance that if not used expires in October, my brother has a car worth around 2k and is willing to let me insure it for the year as he has a company car he uses (the car is still on finance to my brother)
I would need to be the registered keeper of the car otherwise insurance is crazy high.. is this allowed or will it affect my DRO?
Sara (Debt Camel) says
do you need a car?
you are allowed to own a car worth less than £1k.
it may not be possible for you to be the registered keeper of a car that is on finance – he would need to ask the finance company. who would pay the finance on the car? when doe it end?
S says
I would from September when by daughter starts school but without my No claims my insurance wouldn’t be affordable, he has spoke to the finance company who have said it is fine as he has paid over 50% of the total finance, the finance ends December 2021 he would continue to pay the finance and would also be named driver on my insurance policy for the year when he would then have the car back.
Sara (Debt Camel) says
So the car itself isn’t a problem for your DRO – it doesn’t belong to you, it belongs to the finance company.
Are you already talking to an adviser about a DRO? Explain the situation the advise and ask if the car insurance will be an allowable expense for you.
S says
I already have a DRO started in February, I have an allowance in my budget for travel and my insurance would only be £10 more than what is in my budget so I will double check but don’t see it being a problem
Sara (Debt Camel) says
Definitely talk to the adviser who set it up, hopefully you should be fine.
Dee says
Hi,
As my car is worth more then a 1000 pounds but I still need it to get my son around due to he’s ADHD can I transfer the car in he’s name but still be the register keeper or would I need to sell it to him to apply for the DRO. I suffer with anxiety and depression and this issue isn’t helping it.
Thx
Sara (Debt Camel) says
Hi Dee,
can I ask how much the car is worth? You can get a valuation using Parker’s Guide, look for the “private poor” option for its condition.
How old is your son?
Have you been struggling for a while or is this mainly the result of coronavirus? Are you currently making payments to your debts?
Dee says
It came in at 1600 from what I can remember, my son is 20.
And for a couple of months now due to court .
Sara (Debt Camel) says
ok, so that isn’t a lot above £1000. If you need a DRO now, then yes your son would have to buy it. If he gives you £1600, then you are over the “£1000 in assets” for a DRO but the DRO itself costs £90 and you could use c. £600 to either buy something essential that you need (keep the receipt!) or to repay a priority debt such as rent arrears or to make small payments to all the debts. Then you could have your DRO and still have the rest of the money in your bank.
The other optioj would be to wait a while and see if the value of the car drops. It’s quite hard to sell second hand cars at the moment so the prices may come down.
I suggest you talk to National Debtline on 0808 808 4000 about your situation, whether quo will qualify for a DRO, whether you have any better options and to get a plan for what to do with the car. Do tell them about your anxiety and mental health issues – they will be sympathetic.
Dee says
So if he did buy it I can still be the registered keeper and pay the insurance and tax as he doesn’t drive and I need to get him to places?
Also he would only be able to pay around a 1000.
TIA
Sara (Debt Camel) says
yes you can be the registered keeper, insurer and river for a car that is owned by someone else.
Talk to National Debtline on 0808 808 4000 and see if they think it would be ok for your son to buy half the car for £800 – so you both own a half.
Dee says
Ok thx what do you mean by river?
Sara (Debt Camel) says
it was a typo for driver :)
Dee says
Oh 😂 ok thx for your help
rachel says
Hi Sara
I wonder if you could help please. I have been accepted for a DRO, I just need to do the last steps to get the ball rolling. I am hoping in the next couple of years I will be able to get a mortgage but I am incredibly worried going ahead with my DRO will stop this from happening in the next few years. My credit rating is currently very bad, missed payments etc (no CCJs on my file though) my question is.. would it be better to set up small payment plans with all my creditors (say £5-£10 per month) for example and get rid of my debt this way rather than going for the DRO.
Really what I am wondering is if my credit will be affected as harshly doing this as it would entering a DRO. I have had some of my creditors ask me to pay a reduced amount to get the debts cleared and will be labeled as ‘partially settled’ on my credit file. I would like to repair my credit score in the quickest possible way and I’m not sure which way to do it.
Any advice would be appreciated.
many thanks
Sara (Debt Camel) says
how large are your debts? is your financial situation likely to improve a lot in the next few years?
Rachel Watson says
thank you for responding.
debts are roughly £15k at present. And I am hoping so, I have just set u my own business and expect it to do well over the next few years, though this is not a certainty
thank you
Sara (Debt Camel) says
so a DRO will make it very hard (you should assume impossible) to get a mortgage in 6 years while it is on your credit record. But on the plus side, once the DRO year has finished and your new business starts to do well, you can then save up a deposit.
I don’t see how you can afford £5-£10 to your creditors if you have less than £50 a month spare income and qualify for a DRO.
My guess is it will take you a long while to clear £15k of debt so that will delay when you can start saving up a deposit.
rachel says
Ok thank you for your reply Sara :)
Frankie says
Hi Rachel
I was in your situation 18 months ago . I had applied for a DRO as I didn’t see any other way out all my six accounts had defaulted with two year of defaults showing . I owed just over £14000 . And at the time I was out of work . But I made a list of all my debts and started paying £1 to all of my creditors expect for the smallest creditor , I payed £20 . It was hard at the time but after 5 months paid the first creditor off . I have also started a new job and increase the payments . I have sent CCA to all the other creditors and agreed 5 % settlements with two companies that didn’t hold the CCA. I know owe just under £3000 and hope to clear it by Christmas if we ever get there 🙈. But please just think first as a DRO will effect a lot of your financial situation for next six years . Payplan were sure this was the only way out but like you I would like to get a mortgage and felt like 2025 would be to far away. As I said it’s not been easy I have had to budget very well . this is my story but if the dro is your best option then choose that . All the Frankie
Sara (Debt Camel) says
Hi Frankie, were a lot of your debts pretty old?
Dee says
Hi
I want to apply for a DRO I was first told I can sell my car but still be the registered keeper On a DRO, I’m now being told this isn’t the case as the insolvency will still see this as me owning the car, I’m so confused and i don’t know what is correct and what isn’t!!!
Sara (Debt Camel) says
the insolvency will still see this as me owning the car
That is the default position if the IS is not told any different… but your DRO Adviser can email the Insolvency Service when your DRO is submitted with an explanation and proof that the someone else has bought the car so you no longer own it.
I suggest you go back to CAB and suggest this. If they are reluctant, then talk to National Debtline on 0808 808 4000 about your problem and whether ND will set up a DRO for you.
Dee says
What do you mean a default position? And what would be classed as proof that someone else has brought the car as the dvla said I dont need to inform them as I’m staying as the registered keeper, would It just be a matter of drawing up a contract? I did speak to national debt line that said I can still be the registered keeper so i dont get why both are saying different.
Sara (Debt Camel) says
By “default position” I mean the IS will assume the registered keepers is the owner unless it explained to them why someone else is.
I am sorry you are having this trouble. As you can see, National Debtline agree with what I have said.
You can either go back to Citizens Advice and explain this and ask them to look again, or you can give up on them and ask National debtline to set up your DRO.
Dee says
Ok thank you the cab did say they will ask them the question, so when they do, the IS will say its ok and that they just need to see the money transferred? Also would they need to see a contract drawn up?
Sara (Debt Camel) says
So CAB are going to ask the IS – good.
I would have thought a letter to you from Fred saying he is happy to buy your car registration number X for £X and allow you to be the registered keeper, driver and insurer of it, and then a deposit into your bank account of £X would do – but ask CAB to confirm.
Sara (Debt Camel) says
She needs to tell her DRO adviser so they know the situation but these benefits should not stop her getting a DRO
Joe says
Hi Sara
I’m currently in the process of talking to stepchange about a DRO, but I’m unsure about a couple of things that they mentioned while on the phone. My DRO adviser asked me something along the lines of “what would you say was the reason for finding yourself in this hardship?” Something like that anyway. And I’ve read that a DRO can be refused if they find you at fault, does that link to the answer given to the DRO advisers question? Or do they base it on the civil case I was involved in? The situation I’m in is down to a ccj and MIB debt from a collision, and the claimant won so I have to pay both debts. Hopefully that makes sense, just a little confused as to how they view certain debts.
Thanks for all your help.
Sara (Debt Camel) says
A DRO is not a judgemental process – you won’t be refused one because you lost a court case or were driving badly.
But there are a few specific debts that cannot be included in a DRO. You need to talk to StepChange about the MIB debt and whether this includes an element of personal injury. The StepChange adviser can then look at whether this can be included in a DRO.
Joe says
Thanks for your response Sara. I spoke to someone at the national debtline web chat before calling them, and they said that debts payable to the MIB are different. Currently any debt settled by the MIB for a personal injury claim is an unsecured qualifying debt which counts towards the the £20000 limit and will be discharged at the end of the moratorium. Does this sound right? The letter I received from DwF on behalf of MIB only mentions that they are recovering their expenses, but I assume they would have paid the claimant for personal injury also due to the sum being £15000.
Thanks again
Sara (Debt Camel) says
You can assume that National Debtline have got this right.
Kayla says
I have two basic accounts with two separate banks but my wages gets paid into one of them when I apply for a DRO will the banks freeze or close both my accounts or will I have to open a new account with a different bank
Sara (Debt Camel) says
This isn’t so much a problem with DROs as bankruptcy as your bank will not be told about your DRO unless you owe them money on some other type of account eg a credit card, although they can find out if they do a check. Some banks don’t care and will let you carry on with a basic bank account, others may close it. Ask your DRO adviser if they have any idea what your particular bank will do.
Hannah says
Hi Sara
I saw your comments to another reader about their situation with a car that they are using but had been purchased by someone else. I have a similar situation, long awful court case, violent ex partner, very young daughter etc etc. A friend purchased a car for us to use due to safety concerns. The car is worth approx 3.5K (I’ve checked the Parkers website as you’d advised the other lady to. Business Debtline have therefore recommended a DMP despite the DRO being clearly the right option. What are your thoughts? Should I call National Debtline and get a second opinion?
Thanks in advance.
Sara (Debt Camel) says
Have you explained to Business Debtline that the car is not yours, it still belongs to your friend?
Hannah says
I told them that the V5 is in my name as I insure it at our address and fuel it etc etc. She said that if it’s registered in my name it will be regarded as my asset. I definitely told her that I hadn’t purchased it.
Sara (Debt Camel) says
Go back to her and say it belongs to your friend who has agreed you can tax and insure it. Ask her to look again as you have been told you can have a DRO in this situation if the adviser explains on the DRO application that the car does not belong to you.
BUT do make sure if she is saying that it is the ownership of the car that is the problem. If she is saying it is the running costs of the car that you would not be allowed in a DRO then that is different.
Hannah says
Will do. Thanks!
Denise says
I am going in for a DRO and I’m just wondering if a SAYE affects it. I had taken this out 2 years ago and the money comes out of my wages. When it matures I will get around £550. Will this affect my DRO, or should I put the saye on hold as I can wait another few months before I could action it. Thanks for your help.
Sara (Debt Camel) says
How much are you paying to it each month?
When does it mature?
If you “put it on hold” what happens to it?
Denise says
Hi Sara, £15 per month and it comes out of my wages. It matures on 1st March 2021 and if I have up to 1st of August to action it, it may alter the value depending on share price at the time, but this will be minimal and probably around £10 difference.
Sara (Debt Camel) says
Owning an asset worth c £550 now will not prevent you from having a DRO unless you have other assets that take you over the permitted £1000 allownce.
Receiving £550 in cash in March 2021 would not be a problem if your DRO is underway. You would have to notify the Official Receiver but as it is under £1000 they won’t care (unless you have other windfalls during your DRO).
The only thing that concerns me is the £15 a month payments. You should discuss these with your DRO adviser. The question is, would you have more than £50 a month spare income if you stopped making these payments? That will depend on your exact circumstance so i can’t say, but your DRO adviser will be able to.
and if I have up to 1st of August to action it
I don’t understand what this means or what your options are. Talk to your DO adviser about them.
Denise says
OK Sara, thankyou for your help xx
Helen says
Has anyone had an experience with renewing a tenancy during the moratorium period. I was credit checked in March for my rental property and all was fine. I have just turned my life around after a violent relationship and addressing my finances was my final hurdle. The tenancy is due for renewal and now the DRO is running. Will the landlord want to go through the process of referencing and searches again for renewing if rent has not been an issue and they are happy with the way I have managed this tenancy? I don’t want to have to ask a guarantor unless I really need. Thank you.
Sara (Debt Camel) says
I think it will depend on your landlord and also the lettings agency if there is one. Not sure knowing what has happened to other people will help you much.
Jane says
The vast majority of landlords when they renew a contract just get you to sign the paperwork for another 12 months. I’ve rented for years and years and I’ve never had credit checks etc done when renewing a contract. It’s just a very small admin job normally, not a complete re-run of what they do at the beginning of the tenancy.
Emz says
Hello, I would like to apply for a DRO however I have been unable to pay my debts for last 4-8 weeks (usually I pay minimum payment but I haven’t been able to pay anything at all recently) will this go against my application?
Many thanks
Sara (Debt Camel) says
That isn’t a problem for getting a DRO.
You should treat all your debts the same (except thing like rent, utilities and council tax which are priorities) so pay them all OR pay none OR pay all a token payment eg £1 a month.
Emz says
Thank you for your reply. I will contact step change to start the application. Do you know how long the whole process normally takes?
This site has been so helpful thank you!
Sara (Debt Camel) says
it used to be about 10 weeks. May be a couple more at the moment.
Tania says
Hi,
I would like to ask, once I’ve made the application what checks does the OR do on their end.
I know StepChange check all paperwork before sending over, but does the OR recheck again?
Do they also check anything during the momentary period?
Thanks
Tanya
Sara (Debt Camel) says
I think the OR makes some checks but they are very quick – an application is normally approved within a few days – and nowhere near as detailed at StepChange’s. As a result the VAST MAJORITY of applications are approved. As the article above says, in the three years they approved more than 80,000 DROs and rejected only 233…
They don’t make routine checks on you or your bank account during the moratorium. Most people never hear from them at all!
Tanya says
Thank you so much Sara.
Thank you for taking the time to respond to all those worried about their finances. It’s a stressful time and a DRO is a big decision.
I hope my application is accepted and goes through all okay!
Tanya
Luke says
Hello,
When a bankruptcy order is made, the official receiver notifies the Land Registry and the debtor is entered into the Land Charges Registers, even if the debtor is not know to own any land. Is this the case for a person under a debt relief order?
Sara (Debt Camel) says
So far as I know that only applies for bankruptcy.
Toby says
Hi Sara,
I’m currently dealing with CAB about setting up a DRO. My parents are buying me a property to live in, I will be renting this as tenant. They are putting a 35% deposit on the property, then it’s a mortgage of 14 years. They are not aware of my financial situation and that I’m going into a DRO. They want to put me on the deeds of the property, how will this affect the DRO?
Sara (Debt Camel) says
You can’t have a DRO if you own part of a property. You either need to tell your parents what is happening so they don’t put you on the deeds or give up on the DRO.
But if you decide to give up on the DRO I still think you should tell your nice parents – it isn’t fair on them to conceal that you have big debt problems in this sort of situation. If you end up owning part of a property and have unmanageable debt, your creditors could ultimately go for a charging order over the property – that is unlikely and a long way but it is much better to have the difficult conversation with your parents now.
Toby says
Thanks for the quick reply Sara.
I’m really not in a position to tell them about the debts, as my father has helped me out before with debts and don’t want him to do this again. I’m in circa £12k of debt, with £4K being council tax. My father knows my credit rating isn’t the best, so that’s why he’s taken the mortgage rather than giving me the deposit, then taking a mortgage my self.
Would it make any difference to the DRO if I was to be put on the deeds once the DRO has finished?
If I am put on the deeds, what would other options be to deal with the debts? My GP has classed me as vulnerable in writing as I’m being treated with medication for depression and anxiety.
Thanks
Sara (Debt Camel) says
Would it make any difference to the DRO if I was to be put on the deeds once the DRO has finished?
That would not be a problem for your DRO. Once your DRO has finished, your debts are gone and you can get on with your life.
BUT the mortgage lender may object to you being put on the deeds if you are not on the mortgage, and it is almost impossible to get a mortgage with a DRO showing on your credit record – it will be there for 6 years.
I wonder if your dad understands he probably can’t put you on the deeds at the start without the mortgage lender insisting you are on the mortgage, and then possibly rejecting you because of your poor credit record? Has he talked to the mortgage lender or his solicitor about this?
Do you get any benefits at the moment? Because owning a house can also complicate them.
If I am put on the deeds, what would other options be to deal with the debts?
you will need to talk to a debt adviser about that. You can talk to the person setting up your DRO or, if you haven’t got that far, phone National Debtline on 0808 808 4000.
I’m sorry you are in a very difficult situation. But letting this purchase go through may make things a lot more difficult.
Toby says
My father is not actually taking a mortgage on the property, that will have my name on the deeds. He’s using a rental property he has no borrowing on and taking a small mortgage against that to finance it. So technically the property I’d be on, wouldn’t have a mortgage? There would be need for me to be on the mortgage. I’d expect it’s quite an unique position.
I have started to pay my DRO fee, so it’s not long away. I’d rather wait till the DRO has completed then move on to the deeds. I can see from an IHT perspective, why my father wants to put me on the deeds.
Thanks
Sara (Debt Camel) says
If your father doesn’t have a mortgage on that property it is up to him if he wants to gift part of it to you.
If you are hoping to be able to put off being put on the deeds for a year, well I can’t really comment about that.
Bonnie-Jo says
Hi could I have some advise please.
Currently looking into getting a DRO, well I have been putting it off for 2 years as my circumstances change so dramatically with being a single parent and switching jobs often.
How long does the DRO take to set up if you have all the relevant details the DRO will need IE depters names, amounts etc. ?
Do the Offical recivers need your bank statements?
Or do they go off what you tell them regarding how much you have to live on. Not that it would be a problem but I have 2 bank accounts that’s all.
Who monitors your situation while your in the DRO for the 12 months?. Do the receivers keep contact and do regular checks on your circumstances?
Thankyou
Sara (Debt Camel) says
It normally takes about 10 weeks. if you have all the accounts numbers and balances that will help, but the DRO adviser will still need to do a lot of checks.
The OR doesn’t ask for your bank statements but most DRO advisers will. The way DROs work, the DRO adviser does all the detailed checks before your DRO is submitted – these means the OR approves almost all of them (like 99%) and quickly.
If you have 2 bank accounts you can show statements for both of them.
There isn’t any regular monitoring during the 12 months. You have to inform the OR if you earn more money or have a windfall such as a bonus payment or an inheritance.
I suggest you kick the process off by talking to a DRO adviser as soon as possible!
Mimosa says
Hi Sara,
I know that I have to provide bank statements as a proof of income, but I am self-employed and a lot of my payments are received in cash, or postal orders, so I hardly have anything to show on my bank statements. I have an invoice book, and have issued invoices for services when I receive any money in cash or by bank. Will this be a huge problem? Thanks in advance.
Sara (Debt Camel) says
Unless you have already started the DRO procedure with another debt advice agency, talk to Business Debtline – they are used to doing DROs for the self employed and will have come across this problem: https://www.businessdebtline.org/
PS this doesn’t sound like a major problem to me, it’s how it is reported, not whether you are eligible for a DRO.
Mimosa says
Thank you for your prompt reply. I have spoken with the Business Debtline and the advisor said I’m ok to go ahead, so now waiting for an e-mail from another approved advisor to contact me with the final documentation. I guess they will request a bank statement, as I read on your FAQs. Thank you for all the helpful information you have provided on your website!
Mimosa says
Just to let you know, ONLINE bank statements have gone through, no problem at all for now and no questions asked. Now waiting for Experian credit report. Their service is very slow at the moment… DRO intermediaries don’t approve credit reports from the other credit agencies for DRO, as I have one from credit karma and it is completely clear, only showing my bank accounts at £0, no debts showing etc… because all alleged debts are more than 6 years old, but the intermediary was not interested to see, as it seems that Insolvency Service checks only Experian credit reports themselves. I hope that Experian can provide one, as I don’t have any active credit cards since 2007…It is very stressful to wait a long time… Thanks again for the amazing information on your website.
Patricia says
I am due to move into my new home very soon (contract has been signed). I have worked out incomings and outgoings With an advisor and I am left in the minus. They have recommended a DRO. When would you recommend getting one and will it affect it the fact I have very very recently taken out credit from stores to buy furniture (ready for when I get the house). Also will it affect me the fact I use my credit card for everyday spends – but everyday pay into it? Thank you
Sara (Debt Camel) says
did you tell the adviser that you have every recently taken out this credit? If not, go back and talk about it.
From now on you should stop using a credit card for everyday expenditure. Use a bank account instead.
Hannah says
Hi Sara
You don’t happen to know the fee for a PARV do you? I am unsuccessful trying to find this information via Google…
Sara (Debt Camel) says
People that are eligible for a DRO would normally get a fee waiver from the court.
You need to talk to you DRO adviser about this as getting the PARV order may be a bit more complex at the moment with Coronavirus and the effect on the courts.
Tanya says
Hi Sara,
Does the official receiver check National Insurance or have contact with HMRC.
Are HMRC informed of my DRO?
Thanks
Tanya
Sara (Debt Camel) says
can I ask what you are concerned about? It could be a variety of things and I can give a more helpful answer if you explain.
Tanya says
Hi Sara,
My concern is are they connected with HMRC and will my tax be affected. Or do they cheque my pension contributions at the beginning or end of momentary period?
I have a private pension and also get carers credit.
Sara (Debt Camel) says
Your tax is not affected directly like it is in bankruptcy.
If you owe HMRC any money – this is typically self-employed people – then obviously HMRC are told.
The advisor who sets up your DRO will look at your private pension and the contributions you are making.
Chrystal says
Hi I know it seems like a silly question but I’m looking into getting a debt relief order and just wondering if ordering takeaways would be classed as my monthly food shopping spend? I mainly order food due to not having the proper cooking equipment and I’m just wondering if this will effect my DRO? Thank you all kindly.
Sara (Debt Camel) says
You need to talk to the debt adviser setting up your DRO about this.
If you aren’t already talking to one, get in touch with your local Citizens Advice. They do DROs and they may also be able to help you apply for grants for cooking equipment.