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
Gretta says
I’m currently living with parents but accepted a council house, I was due to move but with pandemic has been delayed. I have 16k in debt from a loan for my parents mortgage.
I have recently taken out store credit and purchased a new TV & washing machine ready for my new house (as I thought I was getting it soon) can these be classed as assets?
I have never missed any payments with any debts ever but I’ve worked out my new home bills & rent and there’s no way I can afford it all so I shall be applying for a DRO once I’ve moved.
Is a phone contract and car insurance included in the debts? As this would take me over 20k,
Thank you
Sara (Debt Camel) says
I have 16k in debt from a loan for my parents mortgage.
What does this mean?
Gretta says
They were in arrears with their mortgage and could have lost the house so I took out a loan and paid it straight into the mortgage
Sara (Debt Camel) says
how long ago was this?
Gretta says
Last year, the agreement was They would pay the repayments but never bothered so I’ve been left with paying it off. Unfortunately I didn’t get anything in writing of them saying this either
Sara (Debt Camel) says
Do your parents understand the problem this is causing you?
You need to talk to a debt adviser about this and your whole situation. You can’t take a loan give it to a relative and then assume you can opt for insolvency. I suggest you call National Debtline on 0808 808 4000.
Gretta says
Yes they understand, but clearly don’t care too much! I spoke to a debt advisor in January who told me I could try to take them to a small claims court but without written proof they were going to pay me back they could claim its rent money for me living there or anything, And id need the money to take them to court So the advisor recommended a DRO once I get my new house, I am just trying to prepare at the minute and write down my debts and work everything out so just wondered if car insurance and phone contract are included in the up to 20k please? And could a TV be included in assets? Thank you for all your help
Sara (Debt Camel) says
So if the adviser is happy to set up a DRO, you should ask them these questions. Yes a TV is an asset, but it is only the secondhand value.
EDIT The DRO limit changed in June 2021 to £30,000.
Michele Rimmer says
My friend has been advised by Step Change to apply for a DRO. Can she do so if she has been selling items of her own on ebay in order to make ends meet? she hasnt mentioned this to SC and is worried it might preclude her from applying.
Sara (Debt Camel) says
I am not sure what this would be a problem. Is she just trying to keep up with the debts at the moment? She needs to talk to SC and say what is happening and why she is worried – it may not be a problem at all!
Mohammed says
Hi Sara
I am currently self employed and due to this pandemic I have had no income and cant see my situation getting better for the next 12 – 18 months.
I have around 13k debt, credit cards and overdraft in total and have never missed any payments.
I have a couple of questions, if i do go forward with a potential DRO, would the one off self employment grant be included and do benefits such as Child benefit, child tax credit and working tax credit which my partner receives in her account need to be included.
Sara (Debt Camel) says
if i do go forward with a potential DRO, would the one off self employment grant be included
If this is money you have already received and it is sitting in your bank account, then that money is an “asset” that will be taken into consideration – basically you can’t have more than £1000 in your bank account.
But applying for a DRO takes time, typically about 10 weeks at the moment. And the SEISS grants only cover about 70% of 3 months of self employed income. So you may have that money now but you will be spending it over the next couple of months while your DRO application goes through.
You will need to talk to the adviser setting up your DRO about your likely level of income over the next year. As you are self emplyed, the best place to get advice is Business Debtline, phone 0800 197 6026 9am – 8pm Monday to Friday.
and do benefits such as Child benefit, child tax credit and working tax credit which my partner receives in her account need to be included.
Yes, tax credits are a joint claim between you and your partner. Also are you getting housing benefit?
But if you have no other income apart from benefits, you will qualify for a DRO.
Stuart says
Hi i am looking at a DRO for my father and was wondering how would it affect the chances of getting one if he payed off his over draft so he can keep his bank account he isnt into his overdraft so would just be a case of cancelling the overdraft with the bank.
Sara (Debt Camel) says
If he pays off his overdraft it may be treated as having given “preference” to the bank and not been fair to his other creditors.
Also even if he does clear the overdraft the bank may still close the account if he goes for a DRO.
He would be better advised to plan on getting a new basic bank account, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
Stuart monkman says
Even if he isn’t using the overdraft facility?
Sara (Debt Camel) says
Yes. Some banks will close a standard bank account on Insolvency.
Stuart monkman says
Thanks for your quick response Sara :)
What would be your advice on money he has in the bank from a backdated PIP Award Jan-June just over 2K.
Also would you set up the new bank before or after DRO application?
Sara (Debt Camel) says
so this money is in a different bank account?
Stuart says
Hi, my wife only gets carers allowance for me do I include this in mine or her income?
Sara (Debt Camel) says
That is her income.
Beverley Roberts says
My partner and I are applying for social housing. I am going through a DRO process,do I have to tell the new social housing? What impact will it have
Sara (Debt Camel) says
You have to answer any questions honestly. You aren’t being offered credit (I assume) so you don’t have a legal obligation to tell them about your DRO unless you are asked. If the Housing Association credit checks you the DRO will show up.
I haven’t heard of people having a problem in this situation but it will depend on your HA.
Ripa says
Hello
I have just been granted a DRO last week and had a couple of questions. I have tried to ask the DRO Adviser but they did not seem to be any clearer and thought maybe someone here may have some experience.
I currently have a Credit Union loan secured to my savings and repayments were being made via a salary deduction. Some of the deduction goes towards the loan and a small portion towards savings. I realise that my savings will be offset against the loan, which I’m okay with, but wanted to know what happens with the salary deductions. Do these automatically stop? I contacted the Credit Union and they won’t agree to stopping them and have said they need to refer this up to someone senior.
I also have some rent arrears (council tenant), which I have tried to reduce for the past 6 months and the arrears have not increased. Even after the DRO ends will these arrears be written off by the Council? Again I haven’t really had a straight answer from the rent department and all they have said is that I need to continue to pay the arrears.
Sara (Debt Camel) says
Yes the CU should stop the deductions.
But you have to keep on paying the rent arrears or you can be evicted.
Ripa says
Thanks for the reply.
They CU are due to receive a payment this week. If any salary deductions are made are they applied to the loan or refunded?
Yes I’ve agreed with the council to continue paying £5 per week and they will not look to start eviction proceedings. Once the DRO is finished will the remainder of the rent arrears be written off?
Sara (Debt Camel) says
if there is a deduction from your salary, I suggest you send the CU a complaint and ask for the money to be refunded to you.
You will need to keep paying the rent arrears after the DRO is finished.
Ripa says
Hi Sara
July’s salary deduction was taken, so I contacted the CU, they asked me to fill out a new salary deduction to Nil, which I have done and used my savings to reduce the loan balance. However, they are refusing to refund July’s payment saying that it was my responsibility to stop the salary deduction.
I’ve pointed out to them that the DRO wasn’t even granted until 17/07/2020 and the salary deduction was the 26/07/2020. So even if I let them know it would have been too late to make changes.
The CU have said they will only refund if the DRO adviser can give them case law showing that a creditor has to refund payments after a DRO was granted. I’ve contacted StepChange, but have not received a response yet, what do you suggest?
Should I make a formal complaint?
Sara (Debt Camel) says
I think a formal complaint is a good idea, but I suggest you wait for a response from StepChange.
Tori says
Hi Sara
I have been laid off from my job due to decline in physical health (not worked since march). I am currently surviving on UC, I am hoping to be able to pick up a few hours work to top it up, but this wont be for another couple of months. I have £17000 debt on credit cards. I have done a provisional budget which comes to £690 per month (excluding rent). my current income from UC (excluding rent) is £315 per month. If I go ahead with a DRO now, will I be able to top up my income in a couple of months when i am able to, so that it matches my budget, or should I wait until I have the earnings coming in before I apply for the DRO?
Many thanks for your help!
Sara (Debt Camel) says
Your DRO adviser will go through the details with you. It’s not unusual for someone to have a “deficit budget” when applying for a DRO and that isn’t in my opinion a reason to delay a DRO application.
But obviously if your deficit is huge, then that is your main priority and it may be sensible for the DRO to wait.
If you do have a deficit budget and start to earn a bit, then your surplus income may still be under the allowed amount and your DRO should be unaffected. Again your DRO advised should explain this in detail.
If you are just doing research at the moment, I suggest you kick off the process asap by talking to National Debtline on 0808 808 4000.
Sara (Debt Camel) says
If you gave them a reasonable description in your email and they said they didn’t need the detaiils, that is fine. keep your email and their reply in case it is ever queried, but that is unlikely.
They don’t need to be told that your UC has gone up because of covid.
Michael66 says
Good morning,
yesterday I had my debt relief order granted and it is due to run until 18th August 2021, I haven’t had an email from the insolvency service but I checked the insolvency register and it’s listed as granted.
My question is this, will the loans/debt that are included in the dro be marked as settled/discharged/closed from the 18th of August 2021 on the anniversary of it being granted as the 12 month period will be up on that date?
Are there any checks or final assessments conducted?
And finally how long after a DRO being granted will you usually see it reported on your credit report/score mine hasn’t been updated as of yet!
Sara (Debt Camel) says
See https://debtcamel.co.uk/end-dro/ for what happens at the end of your DRO year.
And finally how long after a DRO being granted will you usually see it reported on your credit report/score mine hasn’t been updated as of yet!
A few weeks I guess, but does it matter? You can now relax.
Michael66 says
Hi Sara,
Thank you for your reply!
Ignore the part about not having heard anything! It was granted overnight and I can now see it on the insolvency register- I’ve printed out a paper copy and saved a digital copy for my own records for when it disappears off the register in the future just incase I get any come backs from any of the people I previously held debt with.
I’ve also just done a ring round of all the creditors to make them aware that this has now been approved and I’ve emailed relevant collection departments within these organisations with a copy of the DRO paperwork and the print out from the insolvency register to show it has been granted.
Hopefully now they will start their internal processes for closing the accounts or at least cease all contact!
Sara (Debt Camel) says
ok but for anyone else reading this, I will say that there is no need to do anything. You could sit back and relax and just respond to any creditors that still contact you. There is no need to ring round which a lot of people might find very stressful.
Kerry says
Hi, I have just started a dro. My mobile phone contract finishes next month, am I able to upgrade? It wasn’t included in debts and phone I have is dying on me.
Thank you
Sara (Debt Camel) says
Well you can try if the amount you would be borrowing is less than £500, but it’s possible the mobile co will say No. If this is rejected, you can look for a cheap phone, possibly second hand, or from a friend who has upgraded, and get a cheap Sim only contract for it.
Steve says
If I apply for a dro will my wife’s car be taken into account
Sara (Debt Camel) says
Simple answer – no.
More complex – did you buy it for her? Are you paying the running costs?
Dan says
Hi, I have already been granted a DRO, and I have a credit card that doesn’t have any debt on it, had it since before the dro, am i still allowed to spend on this?
Sara (Debt Camel) says
You are allowed to take out credit op to £500. But this is a pretty bad idea. Can you not manage without this?
tabsum says
Hi im thinking of taking out a dro but I have a car on finance I am paying monthly and I don’t want to lose it as I need it for work what can I do
Sara (Debt Camel) says
I suggest you talk to a debt adviser about a possible DRO and what your other debt options might be. Phone National Debtline on 0808 808 4000.
Mike21 says
At what point after the dro being approved should creditors stop adding defaults to your credit file? I know the DRO will be on mine for the next 6 years from the date it was issued but I’m concerned that if they keep adding defaults every month for the year I’m in my debt relief order that they won’t then drop off my report till up to a year after the order itself drops off
Thanks in advance
Sara (Debt Camel) says
Defaults should be added during the DRO year. But a defaulted debt drops off your credit record 6 years after the first default date – the later default markers don’t matter.
See https://debtcamel.co.uk/repair-credit-record-dro/ which looks at this in more detail.
JJ16 says
Does child maintenance need to be included when your doing expenditure? I’ve got a claim with child maintenance but still waiting on receiving anything.
Sara (Debt Camel) says
This is a difficult situation – do you expect that this will start to be paid? You need to talk about this with your DRO adviser.
Victoria says
I have spoken to National Debtline regarding getting a debt relief order, and have the budget form ready to complete. I have not worked since march, I was previously on tax credits, now I am getting universal credit. Since I spoke to debtline a week ago, Tax credits have sent me a lump sum back dated of £2000, I have spent around £900 on furniture and essentials as I had nothing before and have just moved into a unfurnished studio flat. I would like to put the rest towards paying off my credit cards and overdraft before I make the DRO application (I owe £17500), but I am aware of the rule about not giving preference to any lender. I have both an overdraft and credit card with one bank, two credit cards with another bank, two credit cards with a third bank, then a further one with a fourth bank. My question is – how do I divide the money between the debts whilst sticking to the ‘not giving preference’ rule? Do I divide it between the four banks equally, or between the seven different accounts (including overdraft) equally? Thank you for your help!
Sara (Debt Camel) says
Hi Victoria,
First I have corrected the name of the firm you are talking to National Debtline – I assume that is right and you just made a typo?
This was a good time to get this lump sum for you. I am not saying £900 is too much to have spent, but National Debtlinemay ask what the money was spent on so it may help if you have a list.
You don’t have to distribute all of the rest of the money before getting a DRO – you are allowed some money in the bank. And in particular you should make sure you are up to date will all your bills at the point you apply – council tax (I hope you are getting council tax support? But you may still have some to pay), rent, utilities, mobile, TV license etc
And of course there is the £90 DRO fee.
So I think you need to talk to National Debtline about this and about the money you will have left. If they think that is too much for you to start a DRO with, then they will explain how to distribute the money – normally this is done “pro rata” so accounts with a higher balance get more.
Victoria says
That’s great, thank you Sara!
Emy says
Hi,
Does having a payment holiday affect your chances of a DRO being approved?
Sara (Debt Camel) says
That’s quite a vague questionM I’m not sure what you are worried about? Could you describe a bit more about your specific situation?
Emy says
Hi,
Im thinking of applying for a DRO but have took a payment holiday for 3 of my creditors and for 2 of my creditors im making minimum payment to.
After the payments holiday ends I won’t be able to pay the minimum payment to my creditors, do payment holidays affect a DRO being approved?
Sara (Debt Camel) says
I haven’t heard that this is a problem. I suggest you talk to National Debtline on 0808 808 4000 who can check you meet the other DRO criteria.
If it is a problem because you haven’t been treating all your creditors the same, then National Debtline can talk about paying them all the same for a while and then going for a DRO.
Emy says
Hi Sarah, I spoke to National Debtline yesterday and they said because my husband is self-employed that business debt line will deal with me and transfered my call to them. They didnt pick up as they were really busy.
My debts are not joint, I dont work. Should I speak to CAB?
Sara (Debt Camel) says
Yes you can go to CAB, but the suggestion to talk to Business Debtline is sensible if your partner also has debt problems.
Hannah says
Hi Emy
I was in exactly the same position in terms of taking advantage of payment holidays during lockdown and it wasnt an issue during the DRO application process.
Emy says
Thank you for your help!
Hannah says
Welcome. Hope all goes smoothly.
Lee says
I have a car that is provided to me on a NHS salary sacrifice scheme. This is my only means of transport and the scheme includes insurance, tyres, maintenance and MOT. The car will never be owned by me and so won’t be an “asset” at the end of the contract, and the car is handed back to the leasing company once the contract comes to an end. To hand the car back now would incur an early termination fee of circa £3000 which obviously I can’t afford to pay. The monthly fee for the car is deducted directly from my wages by my employer. Can I still apply for a DRO with this in mind?
Sara (Debt Camel) says
It won’t be a problem as an “asset” because you don’t own it.
Your DRO adviser will consider if the car is an essential expanse for you – from what you have said it probably is.
So I suggest you talk to a DRO adviser about this and the rest of your situation – good luck!
Mark says
when does dro drop of file is it 6 years from start of dro,or 6 years from disharge of dro which was 1 year later
Sara (Debt Camel) says
6 years from the start.
MS says
I have a DRO in place (March 2020). My current phone is having all sorts of issues and I need to get a new one. Is it possible to get a phone on contract? Or is this not allowed until the 12 months is over?
Sara (Debt Camel) says
You wouldn’t be breaking the DRO rules if the amount you are borrowing is less than £500. But you may find you are rejected for the finance.
One option us to look for a cheap phone eg https://www.techradar.com/uk/best/best-cheap-phones or a second hand one and get a SIM only deal.
Tom says
I’m thinking of applying for DRO, however, a part of me is scared it can be rejected. If it’s rejected, would I damage my credit rating for the next 6years with the DRO entry?
Sara (Debt Camel) says
Less than 1 in 300 DRO applications is rejected.
In the very unlikely event this happens to you, a DRO does not show on your credit record.
Anon says
Hi there,
I am currently renting with my boyfriend and we split the bills 50/50. I am a full time mature student and I am starting to struggle to pay my credit card off and I’m only able to work one day every other week due to the workload from university. I am thinking about applying for a DRO and was wondering if my boyfriend will be notified of my debt and the DRO application as I am ashamed of it and I’m worried about him finding out. Thanks.
Sara (Debt Camel) says
Your boyfriend won’t be told.
But it is a pretty bad idea to try to conceal something like this from your partner. If say you two wanted to move and get a tenancy together, a DRO could affect a credit check. He may be more understanding than you expect – it’s hard for student’s to pick up much casual work at the moment.
When will your uni course finish? Depending on how large this debt is, it may be a better idea to make a token £1 a month payment to it now until uni finishes. Of copurse if you have a lot of debt and no prospect of really paying it off, a DRO may still be a good idea.
Tzvetelina says
Hello…I will be applying for DRO soon as currently lost my job due to covid and claiming UC.My car is high purchase and I pay every month.The car is not on my name.Can I still apply for DRO?
Sara (Debt Camel) says
The car is not on my name
I assume the HP car finance is in your name.
See the I have a car on HP – is this a problem? in the article above.
BUT how will you be able to pay the HP if you are on UC? Are you expecting to be back in work soon?
Jeffrey says
Hi
I am considering applying for a DRO but I had a couple of gambling payments paid for through my bank account (nothing drastic) but will this affect my application? Will I have to account for money that is spent through my bank account or payments showing in my bank statements.
Hope this doesn’t sound confusing.
Thank you for the help
Sara (Debt Camel) says
Having gambling showing on your bank statements won’t stop you being accepted for a DRO.
A major gambling problem that significantly contributed to your debts could potentially lead to you getting a Debt Relief Restrictions Order. In a DRRO your debts are still cleared at the end of the DRO year but the DRO restrictions (eg you can’t borrow more than £500 without telling the creditor you have a DRO) will last for more than the year. See https://debtcamel.co.uk/bankruptcy-restriction-order-bro/ – to be honest these make very little difference to most people and so are not something to worry about.
DRROs are rare and you wouldn’t get one unless gambling had been significant factor. “A couple of gambling payments” makes it sound as though your gambling wasn’t a major problem.
The adviser that sets up a DRO can talk to you about the details of your situation. Don’t let worries about this stop you from getting detailed advice on a DRO!
Jeffrey says
Sounds good.
Thank you Sara for your time in replying.
Mark says
Hi, I’ve had a IVA fot a year, but my Income has dropped and I could no longer afford the payment’s as my income and expenditure is now at – £90 per month less than I have coming in. My IVA. Company have advised me to terminate my IVA and going forward recomended that I should apply for a debt relief order as they don’t offer them. Is this something I can do.
Regards Mark
Sara (Debt Camel) says
It is possible. See https://debtcamel.co.uk/end-iva-change-to-dro/.
Mark says
Hi Sara, Thank you for all your advice and being so helpful.
Regards Mark
Mark says
Hi Sara, I’ve noticed omy IVA annual statement that one of my creditors has sold the debt to PRA Group will they persu me straight away now my IVA has been cancel.
Regards Mark
Sara (Debt Camel) says
I would be surprised if you get more than one letter in the next couple of months. Really, there is no need to panic about this, just take advice on a DRO.
Mark says
Hi Sara, Thank you for that, ill get started wright away.
Regards Mark
Mark says
Hi Sara. I’ve recieved a final statement and authority of cancellation of my IVA after looking at the statement it appears another debt from a credit card I had for my business which went bust 10 years ago has imerged to haunt me. So does that mean a can’t go ahead with a DRO now as it takes my total debt to over 20,000. I have read that becouse the debt is 10 years old It can’t be persuade through the courts.
Thanks Mark
Sara (Debt Camel) says
phone National Debtline on 0808 808 4000. they can talk to you about whether this debt may be statute barred or not.
Mark says
Hi Sara, thank you for that, but if I’m paying out more than I have coming in can I still apply for a DRO. I have debts around 10,000 and we just manage to get by since we stopped paying the IVAb. We have no rent or council tax arrears and we are on pre pay meters for gas and electric with no debts on them either. We do however have a car on hire purchase with 2 years left on it which I use to travel to and from work as Its 20 miles away and again I’m up to date with the payments of £98 a month with a little bit of help from my mother in law from time to time.
Mark
Sara (Debt Camel) says
if I’m paying out more than I have coming in can I still apply for a DRO
you can have a DRO with “negative disposable income”.
Talk to a debt adviser – phone National Debtline on 0808 808 4000. they will work through whether you are eligible and what your options are.
But if you cant afford the IVA, with 4 years to go continuing with it is very unlikely to be a possible option.
Mark says
Hi Sara, Thank you for your advice, I’ll give them a call.
Regards Mark
Mark says
Hi, Sara, I’ve just received a email from my IVA company to sign electronically to cancel the IVA. How much time will I have to set up another debt solution, hopefully a DRO before they my creditors take action.
Regards Mark
Sara (Debt Camel) says
That depends a bit on your creditors. Some people find that they are literally never contacted… but obviously you can’t rely on that happening.
Read https://debtcamel.co.uk/when-iva-fails/.
Bottom line – no need to rush into this it’s fine to take a few months. But the worst thing is to do nothing now, have your finances improve a bit and then find in 4 or 5 years all your creditors pop out of the woodwork.
Holly says
Recently I have been in contact with citizen advice back home in the UK and they are willing to submit an application for me for a DRO, despite me being abroad (I am within the 3 year period) But of course I have to wait for my IVA to fail, she said this could take a few weeks or a few months. What is the average time do you think?
I was surprised to find that I owe £16,000! At the start of my IVA this is what I owed. But i have paid off £4000, but perhaps this just gone straight to payplan? I am also worried about the fees to payplan once i failed my IVA, will i owe them money?
I am also worried about my creditors calling me and adding interest. Don’t want to be anywhere close the £20,000 threshold for the DRO.
Also, for the DRO application i will have to send the last 3 months of bills, which are in my partners name (we are not married but engaged) so I am worried this will be a problem too.
I completed one year and still 4 years to go.
My friend offered the money . I have no personal Moveable or immovable property at all . My income reduced in last year and I have health issues as well
Sara (Debt Camel) says
It typically takes 3 months to fail an IVA. I don’t know how co-operative your IVA firm would be in doing this or whether they may insist on reviewing your situation at the end of the break.
IVA firms don’t normally chase for any remaining fees when an IVA fails, but you should talk to Citizens Advice about this as if they do, the fees need to be scheduled in your DRO. Also talk to Citizens Advice about what proof they want about bills etc.
I assume you intend to return to the UK?
Holly says
Thank you for your reply.
I don’t intend to return to the UK. I am in Mexico currently, my partner is Mexican. We plan to settle here, but of course I want to get my debt situation back home sorted.
Yes I messaged citizens advice back regarding the bills and whether it will matter that they are in my partners name, so i will wait for their reply. I really hope it won’t be any issues. Once I received confirmation of this, I will contact payplan about failing the iva.
I also hope payplan won’t make a fuss about failing. I had already discussed this option with my iva case worker and she said if i am sure that is what i want to do and have done my research she would speak with her supervisor about failing the IVA.
When will creditors start adding interest?
I will try get everything ready, so when iva does fail, i have all documents
Sara (Debt Camel) says
When will creditors start adding interest?
That depends on the type of debts and whether they have been sold to debt collectors.
Holly says
I think all my debts have been sold on, last time I checked.
But will they start adding once it has officially terminated? or during the 3 month failing process, if that makes?
Sara (Debt Camel) says
Then it’s much less likely any interest will be added. You just have to wait and see how this goes. Citizens Advice will have a list of your debts so they may be able to make a better guess.
Holly says
Hello Sara, a quick update.
On having contacted payplan about failing the IVA, my case worker spoke with her supervisor and her supervisor suggested that before going for the DRO, i should have a creditors meeting to see if given my circumstances they will agree to end the IVA on a paid to date basis. I have only paid 2 years into it so was surprised by the suggestion but since was coming from the supervisor i felt hopeful that maybe there is a good chance they will accept, otherwise why suggest it. I am just waiting to hear back about the meeting.
My creditors may accept if they know I will go for the DRO anyway and i am abroad.
Do you think there is reason to hope?
Sara (Debt Camel) says
That is a very positive suggestion from Payplan. I wish more IVA companies proposed this when their customers are in a lot of difficulty, even in the early stages.
I hope the creditors approve it, but if they don’t, see if Citizens Advice can help with a DRO – they are usually not possible when you are abroad.
suzanne says
Can i ask for my confirmation letter from the receiver to be sent via email only,
and not in a letter form? The reason is, if an official letter arrives,
with the name and address of the official receiver on the back of the envelope?
My landlord and landlady, and other people who live in my block of flats will see it,
they will speculate and guess what it is all about, and they will be right!
Soon after, all my friends and neighbours will know.
It would be the same as taking an ad out in the local paper, telling everyone.
Something so embarrassing, that i would hope and maybe expect to keep private?
If letters from the official reciever has their name and address on the back of the envelope,
as many official letters do, i would much rather have the letter through email.
Sara (Debt Camel) says
I suggest you talk to the adviser setting up your DRO about this.
Lau says
If it’s any help, I didn’t receive a letter when my dro was set up a couple of months ago, they emailed it to me.
Emy says
Hi Sarah,
I have been in contact with business debtline about getting a DRO. My partner is self employed.
Will Businessdebt line in every circumstance look at partners income and mine and include them in the surplus amount even if I don’t have access to my partners money. I gave them a rough figure and they said that I have around 100 pound left each month which isnt the case.
Thank you.
Sara (Debt Camel) says
This is case by case. What matters is how much of the bills each of you pays. Talk to Business Debtline again about this.
Gino Gomalla says
Do all of my bank accounts get closed down after I get a DRO?
I have a few accounts with different providers, but only use 2 of them regularly(the others were for business which has since crumbled).
Sara (Debt Camel) says
Some banks will close accounts. It’s easy to open another account, see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/.
Karen says
My DRO was in 2012.
I applied for a PPI on a Capital One account which was part of the DRO.
They stated they owed me £400+ but wouldn’t let me have it as they were offsetting it against the debt I owed.
Is this legal?
The company who did the PPI claim now want me to pay their fee of £100 but I have refused as I didn’t get a payout.
Can you advise who is correct?
I thought after 8 years I wouldn’t be chased by any monies due.
Thanks
Sara (Debt Camel) says
This is what often happens with PPI refunds where a balance went into a DRO, IVA or bankruptcy.
Did the claims company ask you about any previous insolvency? Are they FCA regulated?
Karen says
Hi sara
I’ve been reading these posts for a few weeks as I’ve been going through the process of a DRO which has finally been put together by My debt advisor.
I have paid the £90 so I guess it’s a waiting game now.
My only worry is, what happens if the original creditor (some were many years old) had sold the debt to an agency but I wasn’t aware? The original creditors are listed in my DRO but I’m scared il still get letters saying I still owe it if it were sold to an agency. Would I still be liable for it? I’m a bit of a worry wort and I over analyse everything!!!🙈 thank god for these forums they have helped me relax and can relate to a lot of the posts here.
I hope my question made sense also, I will need another bank account as my NatWest had an overdraft so has gone into my DRO so my question is when should I apply for a basic bank account? Should I wait until the dro has been approved? Or does it not matter?
Thanks
Sara (Debt Camel) says
If you find out later a debt was sold, you inform the Insolvency Service. This should not be a problem.
Yes you should expect to need a new bank account. But I would wait until your DRO is confirmed.
Sam says
Hi, I have a few questions.
Do the insolvency service freeze all types of bank account with a DRO/bankruptcy or just those with overdraft facilities?
How long after submitting a DRO/bankruptcy will it take to freeze the account?
Thank you!
Sara (Debt Camel) says
Bank accounts are not frozen with a DRO, but most banks will choose to close them even if you do not have an overdraft.
Bank accounts are normally frozen in a day or so after bankruptcy starts, which is typically a couple of working days after your application. You can usually get your man account unfrozen by asking the OR to ask the bank. But the bank will still usually choose to close the account.
So you have to plan for getting a new account… see https://debtcamel.co.uk/bank-accounts-after-bankruptcy/
Have you talked to a debt adviser about a DRO yet? If not, I suggest you do this now – there is always a big rush for debt advice in January, so getting this started in December when they are quiet could be a good move. Phone National Debtline on 0808 808 4000.
Sam says
Hi Sara, thank you for replying!
The reason I’m asking about both is I have gone for bankruptcy and my partner a DRO. We have been working with Christians Against Poverty to do this, but unfortunately there wasn’t much information on this particular subject.
I have both a basic Barclays and basic Nationwide account, my partner has the same but also a Barclays current account, no overdraft or anything
Our universal credit is due to be paid on the 24/12 and I’m just worried we won’t be able to access this money as it’s due to be paid to the current account. Any help navigating this would be greatly appreciated!
Sam
Sara (Debt Camel) says
have you submitted bankruptcy and DRO applications? When?
Sam says
Yes my bankruptcy was applied for online yesterday, my partner told CAP to go forward with his DRO yesterday too.
Sara (Debt Camel) says
ok so as soon as one of you hears the bankruptcy/DRO has been approved, I suggest they should open a new bank account and talk to UC about whether there is time to get the payment on the 24th switched to the new account.
Kan says
Hi,
I’m in the process of getting a DRO. I’ve completed the paper work but haven’t paid the fee yet. I have received notification about a settlement for a personal injury claim. Will this affect my DRO?
Sara (Debt Camel) says
Settlements for a PI claim come in two parts – you may have all of one or all of the other or a bit of both:
– Special damages (loss of earnings, care & assistance, travel & expenses)
– General Damages (compensation for the injuries received)
Do you know how your settlement will be divided up, as these are treated VERY differently for DROs? Your solicitor should be able to tell you. Also do you know when the settlement is likely to be paid?
Kan says
Hi Sara, I have been informed that it will all be general damages but my solicitors won’t be able to get me a time as they are awaiting reports.
Sara (Debt Camel) says
ok, could this be very quick? Before a DRO goes through?
and how large is the amount – and how large are the debts?
Kan says
I doubt it will be very quick; the solicitors are waiting for the amended medical reports. The company have accepted liability but there hasn’t been an offered made yet… I have filled out all of my DRO paper work and sent it back to Step Change. I have around £15K debt but I’m not sure how much the compensation will be. Do you think it is worth getting the compensation first or going ahead with the DRO?
Sara (Debt Camel) says
OK, so you MUST talk to StepChange about this and I suggest as soon as possible. What I am saying is generally correct but you need specific advice for your situation and I can’t give this.
Receiving general damages after a DRO has started but within the DRO year isn’t usually a problem – they do not count as an “asset” for a DRO so a DRO is not automatically ended. But if the money is used to buy some things eg a car that may count as an asset so DRO could be ended (you may think this sounds bonkers but I don’t make the rules…)
After the DRO ends you can spend the money on whatever.
If you think the money could be huge, a LOT more than your debts, there is also the question of whether it would be better to wait until you get the money, repay the debts and not have insolvency on your credit record. But this doesn’t often happen.
Emy says
Hi Sarah
I spoke to National debtline about a DRO 2wks ago the current waiting time is 8-10 wks before your application is handed to an intermediary.
Kan says
Hi Sara, I have finally spoke to Step Change and a general advisor told me that until I get a figure they suggest to continue with the DRO and then the amount for the PI claim can be taken into account later on.
If I continue with the DRO and it is granted but then get the payment do you think the DRO will be revoked? (I don’t want to pay the £90 fee and then it is cancelled in a month or two)
Also if I have 15K of debt, is there a limit on how much money I can receive before I HAVE to pay the money towards by debts? I know the DRO limit is £1000 but the women I spoke to said that any money I receive will be classed as income and split between my debts whether it’s general or special. I doubt the money I will receive will be more than my debts. I know there’s nothing I can do in the meanwhile, I’m just trying to understand abit more and the women I spoke to from step change didn’t answer my questions she just repeated herself over and over again.
Sara (Debt Camel) says
the women I spoke to said that any money I receive will be classed as income and split between my debts whether it’s general or special.
ah. I don’t think she knows much about this – they are VERY different.
Can you ask to speak to a DRO specialist or a manager? Sorry, but this is really important for you and you need proper specific advice, not good general guesses from me.
Kan says
I am going to try again. The lady refused to put me through to a specialist although I asked numerous times. But I will keep calling until I get the advise I need. Thank you so much for your time, this website is really helpful!
Karen says
If I have a car on a PCP agreement – took it out in Oct 2019 and there is still £13k owing on it including balloon payment (I have £10,100 owing to creditors) will I loose my car? I don’t need it and cannot afford it (running costs are high including insurance) currently I am in an IVA which isn’t working for me. If I let it fail and switch to DRO / Bankruptcy how will it work with the PCP finance?
Max Hayes says
I really appreciate all the information you gave. It helps me with my research in the debt relief order. Thank you for all those suggestions.
Al says
I have recently been accepted for a DRO. At the time of the application I was receiving no income because I live as a volunteer live-in helper. I pay no bills or rent and am fed 1 meal per day. I put this on my application and was accepted.
I’ve recently used a benefits calculator to see if I’m entitled to any benefits and it say’s I can claim Universal Credit. I would like to use the majority of the benefits, if accepted, to pay money to the Mother of my Son. Which will still leave me with less than £50 for essentials like clothes and any extra food if needed. She would receive around £350 per month.
Do you see any problems with this arrangement?
Is money paid to your child’s mother classed as essential?
I’m a bit anxious to go ahead just in case it jeopardizes the DRO.
Thank you very much for the help on the site.
Weatherman says
Hi Al
Child support payments do count as ‘expenses’ before your disposable income is calculated. The DRO guidance says “any child support payments” are counted as expenses before disposable income is calculated – but I would still speak to your DRO Intermediary about this before applying for UC.
The reason is that I’m not sure whether there is a maximum level at which the Official Receiver will say “That’s enough,” and count anything over that as your disposable income. I can understand why there might be (to stop people artificially depressing their disposable income so they qualify, not that this is what you’re doing!), but I can’t find any definitive answer to this, strangely enough.
You should speak to your DRO Intermediary about this before applying for UC and see what they say – and I’d be really interested in their answer.
Sara (Debt Camel) says
Are you still a volunteer live-in helper? Because you may not get the UC unless you are actively seeking employment…
Getting UC if you have no other income may not mean that your DRO is cancelled. You need to talk to the debt adviser who set up your DRO about this.
But if there is a review of your income & expenses:
– paying that much in child maintenence is massively more than the recommended amount, see https://www.gov.uk/calculate-child-maintenance. It would not be considered an acceptable expense.
– but you would be allowed to pay a reasonable amount for clothes, shoes, food, toiletries, prescriptions/opticians/dentists, transport costs, Christmas presents etc.
You seem to have been living on nothing so £50 a month sounds like a lot – it isn’t! Your reasonable expenses will be a lot more than that. And your DRO adviser can help talk you through these. Of course if you then want to give the mother of your child a bit extra, well no-one polices what you actually spend your money on.
Laura says
Hi,
I’m contemplating a DRO, can I check, will they check a few bank statements to clarify my spending? I am assuming yes but wanted to check.
Thanks
Sara (Debt Camel) says
it is up to the debt adviser setting up your DRO but it is common to check a couple of bank statements. And they will always check your credit records to make sure all the debts on there are listed in your DRO, or they won’t be wiped out by it.
Laura says
Hi,
Thanks so much for the prompt reply.
What route / platform would you recommend to start the process? I’d like obviously, a reliable company / DRO adviser but no idea where to start.
Ive spoken to StepChange but equally found some negative comments on Trust Pilot.
Thanks
Sara (Debt Camel) says
If you “only” have a debt problem, I suggest National Debtline on 0808 808 4000 if you don’t want to go to StepChange.
If you are self-employed or have a small limited company I suggest Business Debtline 0800 197 6026.
If you also have benefit problems, your local Citizens Advice can help with them and with a DRO.
John says
Me and my partner owe £4000 council tax (joint account) if I get a dro will my partner still owe the £4000 thanks
Weatherman says
Hi John
Yes they will – the DRO will affect your liability for the debt, not the existence of the debt itself.
You and your partner could consider both getting DROs, if that’s an option. But your best bet might be to get some debt advice.
Sarah says
I have a car on finance (HP) and when filling in application for dro it’s adding my monthly payment to the finance company as an outgoing…my question is if this car is going to be taken back by the finance company on completion of dro then should i remove this outgoing payment to them from my outgoings on financial statement as well as any car related payments such as petrol, mot and insurance as i will no longer be paying these? Thank you for your help
Sara (Debt Camel) says
what would you do if the car was taken back? do you need one?
Dan says
Hi,
I have debts of £10,000 so went down the IVA route which i was paying £90 a month this lasted for 9mnts before i started using my £1000 overdraft which is maxed out , i have contacted my IVA and the agreement has been finished.
I am on long term universal credit my ingoing’s & out goings are up and down I’m worried about the £50 limit on a DRO is this through out the whole 12months or just when i submit my form?, and will my bank statements be checked every 12months?
Also i have just opened up a new basic Bank Account so my Universal Credit is safe, does this now get classed as my main bank account & will it be frozen?
Kind Regards Dan.
Sara (Debt Camel) says
You need to talk to a debt adviser who sets up DROs who can look at your situation – if you haven’t already started this, talk to National Debtline on 0808 808 4000. But if your only income is benefits, you should pass the “less than 350 spare income a month” test.
Setting up a DRO your bank statements will usually be looked at. but after that it is less intrusive than an IVA. There are no routine checks but it is your responsibility to notify the Insolvency Service if you get extra income or a lump sum of money.
Not all bank accounts are frozen in a DRO. Talk to your DRO adviser about yours.
Martyn says
Hi. Having checked the criteria for a DRO I am suitable, I have £6000 debt. I am on Universal Credit with my wife, she gets an extra £341 per month as she is unable to work, will this cause an issue with monthly expenditure? It’s her money but my sole debt, but the monthly UC statement does not specify that it’s her money?
Sara (Debt Camel) says
This is unlikely to be a problem. Talk to a DRO adviser who can go through your full situation.
Elliot says
Hi I’m having a problem with debts I originally applied for a DRO however due to my phone being on finance and they classed it as a personal loan and when the insolvency group looked at my credit report it showed more than 20,000 in total to which it Was refused.
I have £200 I have saved if I was to reduced the full amount of the debts to under the 20k limit can I reapply for a DRO again ?
Bankruptcy scares the crap out of me and I don’t want to necessarily go down that route but I’m starting to loose sleep over it.
Many thanks
Sara (Debt Camel) says
Talk to the adviser that submitted your DRO.
EDIT The DRO limit changed in June 2021 to £30,000.
But there is no reason to be scared of bankruptcy! If you would have qualified for a DRO, then bankruptcy should be a simple process. Apart from the lower fee, there is no real advantage to a DRO.
Stacey says
I’ve checked the insolvency register and this is what it says.. ‘ Currently Subject To Debt Relief Order : Moratorium Period ended on 03 March 2021’ does this mean i can get a higher paying job and it doesn’t matter? My debt is written off? Haven’t received anything in the post yet
Weatherman says
Hi Stacey
You don’t usually get any formal notification of when a DRO moratorium period ends – but yes, your moratorium period ended on March 3rd and you don’t need to declare additional income or assets etc now.
I’m not sure why it’s saying ‘currently subject to DRO’ though. Was there a Debt Relief Restrictions Undertaking or Order as part of your DRO?
Sara (Debt Camel) says
As Weatherman says, you won’t get any formal notification your DRO has ended – but it has!
The entry always says that – see https://debtcamel.co.uk/end-dro/. As that says, take a copy of the insolvency Register entry and keep it – then if a creditor later disputes the DRO has ended you can show them that.
Weatherman says
Aha! Yes, that’s terrible wording…!
NatalieC says
I recently applied for a DRO (last Thursday they submitted it) and I’m waiting anxiously.. I’m still not on the insolvency register, does anyone know usually how long this takes?
Thanks
Weatherman says
Hi Natalie
As a rule of thumb a decision on your application is usually made within about 10 working days (2 weeks). Hang tight!
Terri says
Hi, my DRO was submitted on the 10th February 2021 I have not heard anything back regarding whether it has been approved. There was a query about a hp debt, why there were two amounts for this hp debt, I explained it was for the same debt and it showed up on my credit file like that. Has the DRO been rejected, is this the reason I’ve not heard anything? If you get the DRO how long does it take to show on my credit report?
Sara (Debt Camel) says
I suggest you ask the adviser who set up your DRO application what is happening.
The DRO shows on your credit report for 6 years. But after the DRO year has finished and your debts are written off you can start the slow process of repairing your credit record: https://debtcamel.co.uk/repair-credit-record-dro/
Good luck – most people find the year passes quickly and painlessly.
Kara says
Hi can i ask , i have debts of £8930 and looking to do a DRO – i’m in rented and i’m not unemployed as full time carer for my dad and my son has just been diagnosed with autism – i have put in a claim for DLA for my son with help from Barnardo’s don’t know if this will affect my current univsersal credit claim and also will i still be able to do a DRO if the claim goes through as i will then have more than £50 left over each month. I am really worried as need stress of debts gone but feel money for my son shouldn’t be used for debts i can no longer pay that were a result from domestic violence?
Weatherman says
Hi Kara
When working out your disposable income for a DRO, any money for disability payments is immediately cancelled out by spending (in this case it might go in the ‘childcare costs’, for example).
Because you mentioned domestic violence, if you’re concerned about your address being published as part of the DRO process, you should ask Barnado’s about a Person at Risk of Violence (PARV) order if you haven’t already. Your DRO application would be paused while you get this, but once you do it would mean that your address wouldn’t be made public.
Sara (Debt Camel) says
Do tell your DRO adviser all about the DLA application.
Your UC may increase, see the “Child Element” section https://www.turn2us.org.uk/Benefit-guides/Universal-Credit/Additional-Elements-of-Universal-Credit. But this won’t mean you have too much disposable income for a DRO. As Weatherman says, you can add in extra costs for the disability.
You may get a lump sum from DLA backdating when it comes through (by the way if the DLA application is rejected ask Barnardos or your local Citizens Advice for help to appeal this!). You must discusss this with the person setting up your DRO but it will probably not be a problem.
jeni says
Hi im looking into a DRO, i have a child’s savings account for my son its my name but its a child’s isa with his name on too. it has a good amount in as family members put money in. would this affect it the DRO?
Weatherman says
Hi Jeni
If it’s a Child ISA, the money belongs to the child, not to you. You just ‘manage’ the account. It’s a good idea to be open & honest with the DRO intermediary in any case, so tell them about it – but it won’t count towards the £1,000 asset limit.
Zlatina says
Hi , my DRO has been granted today !
I’ve opened a new basic account with Barclays few weeks ago before my DRO approval!
My question is, do I have to call Barclays and inform them, that I am under DRO moratorium period or not ?
Thanks in advance !
Sara (Debt Camel) says
No you don’t.
Tracey says
Can you please help? I am in the process of taking a DRO out BUT I suffer from Bipolar and in the last few weeks I’ve spent recklessly on storecards about £1000 in a period of mania, will this effect me getting a DRO?
Sara (Debt Camel) says
You need to talk to the debt adviser setting up your DRO about this in detail.
There are two potential problems. The first is concern about fraud – this rarely an issue and with a diagnosis of bi-polar that is less likely. The second us whether you may get a Debt Relief Restriction Order – see https://debtcamel.co.uk/bankruptcy-restriction-order-bro/ fir more about this – for most people they really don’t matter much, not something to worry about.
In the end it cones down to whether you gave any other alternative to a DRO. It would be a mistake to give up and drop out of getting a DRO if it us your only sensible option.
Samantha says
My DRO application has been submitted, and I’m just wondering about becoming self employed in the future. I have read that you can’t call your business anything other than your own name unless you tell each of your customers that you have a DRO. Is this literal or does it mean that your name has to be part of your business name? As I fear nobody would find the business to use it if the name didn’t relate to what the business was, and was solely just my name.
Sara (Debt Camel) says
I suggest you phone Business Debtline https://www.businessdebtline.org/ or use their very good webchat.
They specialise in advice for people who are self employed or who have small limited companies – it’s good to talk to an expert!
Emma says
If I’m having a dro done does the dro officer have access to look in my bank accounts?
Weatherman says
Hi Emma
They don’t, but they will probably ask you to provide bank statements. Is there a particular reason you’re concerned about them being able to access your accounts?
Emma says
I have a joint account with my sister because she couldn’t open an account. I was worried if they closed it she wouldn’t have a bank account