A Debt Relief Order (DRO) is a simple and cheap alternative to bankruptcy if you are renting and have little money to spare each month to repay debts.
A DRO lasts for 12 months and during this time you must inform the Official Receiver (OR):
- if you receive any money or other assets, or
- if your income increases.
If this happens, the OR may decide to ‘revoke’ your DRO. This means the DRO is cancelled and you are back owing your debts. But this doesn’t always happen – the OR has discretion about whether to revoke a DRO.
About one in a hundred DROs are revoked – so this doesn’t often happen.
The DRO limits on assets and spare income
DROs have two important limits which matter if you get some more money:
- you cannot get a DRO if you have more than £50 ‘spare’ income each month that you could pay towards your debts;
- you cannot get a DRO unless the total value of your assets is less than £1,000.
If you get some extra income each month thus may take you over the “spare income” limit. If you get a lump sum of money. this may take you over the total asset limit.
In these cases the Official Receiver will decide if your DRO should continue or if it will be revoked – the legal term for cancelling your DRO.
My income has increased
You need to inform the DRO Unit of any increases in your income, but it is unlikely that small increases will result in revocation unless you were close to the £50 surplus income limit when your DRO started. If you aren’t sure whether you should tell the DRO Unit, talk to the adviser that set up your DRO as soon as possible.
Don’t forget that you have to pay tax on the increase, your pension contributions may increase, and any benefits such as Universal Credit, Child Tax Credit or Housing Benefit may be reduced if you are earning more.
A new Income and Expenditure assessment may be needed, so any increased costs will be taken into account. For example, if your benefits went up because you have had a baby, your costs will also have gone up. Your advisor will be able to help with this.
If your income hasn’t permanently changed, for example you did some overtime one month, then the OR is more likely to treat the extra money as a one-off payment than as additional income.
I have received some money
In a DRO, the money you get is not “at risk”. Unlike in bankruptcy or an IVA, it won’t automatically be taken to pay your debts. But if getting this money means that your DRO is ended, you may need some or all of the money to settle your debts or pay bankruptcy fees.
You must inform the OR about any money or property you receive. This includes:
- money or property you inherit;
- money received from PPI or similar reclaims such as payday loan refunds;
- lottery or other gambling winnings;
- a lump sum from benefits back-dating;
- a tax refund or correction to your previous year’s tax credits;
- money from the settlement of a court case.
You should do this as soon as possible, even if you think the money is going to be covered by one of the situations mentioned below. If you aren’t sure whether you should tell the DRO Unit, talk to the adviser that set up your DRO as soon as possible.
Some special cases:
A lump sum from benefits back-dating
Here it depends on what the benefit is.
If the backdating is for PIP, DLA, Attendance Allowance or Severe Disability Premium, it will be treated as covering additional disability expenses you had, and your DRO will not be affected.
If you get a lump sum for backdating of other benefits, for example ESA, this is treated as getting a lump sum of money and, depending on how large it is, could lead to your DRO being ended. See The amount you receive is important below for details.
A settlement for a Personal Injury
Sometimes this will not affect your DRO even if it a large amount. The DRO guidance says:
Personal injury payments received during the moratorium period will be dealt with depending on the composition of the payments (special and general damages). If the compensation relates solely to general damages and is received during the moratorium period, this will not adversely affect the DRO so long as the funds are used only for living expenses and not converted into tangible assets.
Your solicitor will be able to explain whether you are getting general or special damages (or a mixture). Broadly general damages are compensation for pain and injury and these will be ignored by the OR but you shouldn’t use the money to buy an asset until your DRO has ended.
Inheriting money
This case is covered in more detail in a separate article: Inheriting money when in a DMP, DRO, IVA or bankruptcy.
Money for a special purpose
The OR will take this into account. For example you may have been given a bonus by your employer to spend on training.
The amount you receive is important
If the value of the lump sum is less than £1,000, your DRO will not be revoked if you have notified the DRO Unit promptly and the money is less than half of your debts.
If the lump sum is between £1,000 and £1,990, your DRO will usually be revoked, but this doesn’t always happen. The OR has discretion and a decision will be made looking at your individual case. This could include taking into consideration the size of your debts, health, personal circumstances, age, etc.
For lump sums over £1,990, it is very likely that a DRO will be revoked, but the OR does have some discretion so you should point out any factors you think should be taken into account.
How often is a DRO revoked?
In November 2018, the 250,000 DRO was set up. At that date there had been 2,437 revocations, so about 1% of all DROs.
Not all those revocations were because of someone getting extra money. They also include all the cases where a DRO was revoked because someone had had debts that exceeded the £20,000 limit.
So you can see that the number of people who have problems with additional income or a large windfall is small.
It is extremely rare for a DRO to be revoked after it has completed. These are called Post Moratorium Revocations and the Official Receiver has to go to court to get one. In 2015/16 there were only five cases.
My DRO is being revoked – what should I do?
If your DRO is being revoked, you need to find an alternative debt solution. Obviously if you have inherited a lot, you can pay all your debts off! The other main possibilities are:
- using a windfall to make full and final settlements on your debts;
- a Debt Management Plan; and
- bankruptcy. In practice bankruptcy has much the same effect on you as a DRO, so you can just use some of the money you have received to pay the bankruptcy fees. Your debt adviser can explain how to apply for bankruptcy.
Implications if you are looking at getting a DRO
When you talk to a debt adviser about whether a DRO is right for you, do mention if you think your income may increase soon or you may get a lump sum payment:
- if you expect your finances to recover quickly – perhaps you have been made redundant but expect to be able to get a job soon – then you probably shouldn’t thinking of a DRO. Have a look at a token payment DMP instead until you see how things turn out;
- if you think you may get a lump sum in the next twelve months – from PPI, payday loan refunds, a court case, or backdated benefits – then it would be better to wait and see if this happens before deciding on a DRO. If you get enough money you may not need the DRO at all! And if there isn’t enough money for that, you can still choose to spend some of the extra money on essentials that you need and then go for a DRO.
But unless you have some specific reason to think things will change in the next year for the better, I wouldn’t let worries about whether your income might increase or you might get a lump sum stop you going for a DRO.
As you can see from the statistics above, revocations are pretty rare!
If you want to know more about DROs read this Guide to Debt Relief Orders.
Questions about DRO applications
Apps that make managing money easier
In a DRO what happens if I get a new partner
John says
Hi. I had my DRO accepted on 9th of March 2018 and lucky me since then I have been given the opportunity to do acting TL job which will pay me about £240 extra a month for the next 4 months (so the total will be under the £1000 limit hopefully). Will they look at this as windfall if it is only for a few months or as a change of income? Will they revoke my DRO? I can probably tell my employer I don’t want this, but at the same time I would do with a bit of extra cash before the summer. My disposable income is 0 and debts are 13k. Thanks
Sara (Debt Camel) says
I am sorry but you need to talk to the adviser who set up your DRO urgently. If you are getting any benefits, these would be reduced so the extra money may not be as large as it sounds.
Sadie says
Hi, I’m very worried. My partner had 5 month left of his DRO, his grandad passed away 2 days before Christmas and we’ve just found he’s been left £2000 in his will. We receive income support and my partner receives pip for epilepsy and mental health issues. From what I gather we have to inform them but I’m scared they will cancel his DRO and take the £2000. we really can’t afford to repay the debts. The debt totally is approximately £4000
Sara (Debt Camel) says
Worst case is they cancel the DRO – but they cannot take the £2000 – that is not possible, they have no power to take any money.
If the DRO is ended, then he has two options:
1) he can offer to pay his creditors 50% of the debts, so the £2000 would clear his £4000 debts. Your local Citizens Advice would help you to make these offers if you want.
2) he can use some of the money for any urgent expenses and use the rest to pay the fees to go bankrupt.
I have looked at a similar situation here: https://debtcamel.co.uk/ppi-refund-dro-revoked/.
But all this is in future. What you need to do at the moment is take this step by step and see what happens. Tell the adviser who set up the DRO about this inheritance and tell the DRO Unit.
Sadie says
Thank you for your reply. So we are definite looking at them cancelling the debt relief order.. I don’t know what this will do to my partner, he suffers bad mental health and it’s nearly killed him getting it sorted the first time around and now we are going to have to go through it again when he’s still grieving for his grandad. I’ll ring the cab and IS on Monday. Thank you very much for your reply
Sara (Debt Camel) says
It’s not definite – the DRO Unit has discretion – that’s why I said take it a step at a time. CAB can help you through – its dead easy to apply for bankruptcy nowadays, all online, and he will have the money for fees, so it’s not a bad option if the DRO goes.
Vanessa says
This is a bit complicated. I’ve applied for DRO, but had 2000 which was in my name but was actually my mother’s (I opened an ISA for her, with HER funds but from a joint account, so I’ve been told there isn’t enough proof it was her money). The joint account is now closed, as is the ISA. I was told by Stepchange that if I had 2000GBP, 1000 of it would be given to my creditors. My mother agreed to this. So we spent about 800 of the money, expecting to give the rest to creditors. But Stepchange has now told me that it doesn’t work that way – apparently, they can’t take the thousand left as I am allowed to have it, but I have to say what the 800 has been spent on. I don’t have to have receipts. We have bought a cooker, pain relief supplements, computer protection, decorational items. Do you think they’ll see these as legit, and what other kinds of expenditure should I include? Obviously I have the things I included in my budget, like pet insurance, so can I include those? Thank you.
Sara (Debt Camel) says
Oh dear. It was a shame StepChange weren’t clearer about what you had to do.
Presumably you do have the receipt for the cooker? If the money went into your bank account you can show from your bank account what you have been spending money on eg paying bills such as the pet insurance? Not sure what is in your decorative category – replacing household items that were worn out such as new bedding, towels, should be OK.
If you go back with a list and StepChange still think there is a problem, one thing you could do is say you now understand that the 1000 can’t be taken from you, but would it make a difference if you decide to distribute the 1000 pro rata between your creditors – could you then apply for a DRO? If they say yes, then ask them to work out how much you should send to each creditor.
I would try the simple replying to their question first though , as if that works you get to keep the 1000.
Rob says
My D R O is due to end on 25th july (12 month period)
I am in a little panic because I had a limit to stick to each month and because I am on a zero hour contract I went over a couple of times.Do they average it out over the 12 month period ? My average is £578 and my monthly limit is around the £650 Mark.Also my son has helped me yo purchase a second hand drier.will that affect it also?
Sara (Debt Camel) says
A small gift from your son won’t be any trouble at all.
If you are worried about your increased income, you could talk to the debt adviser that set up the DRO. You may have had extra costs during the year as well and some of your benefits may have decreased.
james says
I have a current DRO that last until November this year I have limited outgoing which are just cover by Universal Credit, if I was to get even a minimum paid full time job I would be left with around £500 a month disposable taking everything account which I believe would result in the cancellation of my DRO, so is it even worth starting work before my DRO ends in my situation? Also I live with a parent would it be worth taking on all the house hold bills until my DRO ended so that I could still work and also not end my DRO?
Sara (Debt Camel) says
You couldn’t take on paying all the household bills but it would be reasonable to pay your share. Then you would also have the extra costs of transport to work, meals at work etc.
It is however possible that you would still be over the DRO £50 a month spare income limit if you managed to get a full time job.
If it was possible to find a part time job for a the next few months, that may be better and would start improving your CV so you could get a full time job come November? Or do a course that would help?
David says
Hi, I set up a debt relief order with Step Change. I am on Universal Credit, and following a work capacity assessment I was told that I had limited capacity for work and work related activity. My money went up from £590 to £915 per month to reflect this, so I contected Step Change and changed my budget which was accepted by the Insolvency Service.
My money was also back dated from December 2016 to May 2018. So that I recieved a back payment of £5400 Universal Credit. So again I informed both Step Change and the Insolvancy Service.
My worry is that the Insolvancy service may not understand that this back dated money is because of my medical condition, even though I have tried to emphasize this. They have told me “The Official Receiver will now review your continued eligibility for your Debt Relief Order following the payment to you of the back dated lump sum of £5,413.11 for Universal Credit.
You will receive a letter in due course”
When I informed them of my budget increase, they let me know straight away by email, so I am concerned that they are choosing to write a letter to inform me regarding the lump sum. The back dated payment reflects the budget that they have already excepted except that it has been retrospectively applied to my Universal Credit account.
I am also wondering if I am allowed to touch any of the £5400? thanks.
Sara (Debt Camel) says
Yes you can spend the £5400, it’s your money, there are no situations in which you may have to give this to the Official Receiver.
BUT let’s look at the worst case… The worst case is that your DRO would be cancelled, you get your debts back but you have this money. At that point it may be sensible to use some or all of the £5400 to settle the DRO debts. Or to pay the fee to go bankrupt. So it may be best not to spend this money for a few weeks until you know what the OR will decide?
David says
The offical receiver has told me that he will revoke my DRO on the 25th of July because I have received over £1000 pounds worth of back dated benefits.
I have received a lump sum of back dated benefits, but this is not enough to clear my debts and I have no excess money in my monthly budget and no assets?
Back dated money was £5,400 of which £4700 is left. Keeping £700 in case I need to go bankrupt. Using another £300 to clear rent arrears. Will spend £!00 on clothing, and need £100 for food until my next benefit payment which leaves £3500 to be split between my 3 main debtors.
One debt will be totally cleared. Another debtor will receive almost half of what is owed. But one debtor will only receive only one 8th of what is owed if the money is split evenly.
Sara (Debt Camel) says
I am very sorry to hear that. Right, let’s go into your options – because you have got £5,400 this is quite complicated, but once you have decided on a route that should be straightforward in practice. NB I do suggest you talk to the adviser who set up the DRO about which one to go for as there may be something specific in your case that means one of these is a better idea or rules one of them out.
First don’t panic. You have months to decide what to do and to do it, not days. Nothing dramatic happens on 25 July. Your creditors aren’t going to rush to court.
Second you need to use any money you have to for real priorities. Rent arrears. Any utilities that have accumulated through your DRO. Food. White goods and other items you are in real need of. I suggest if you buy clothes and goods for the house you keep the receipts for them and keep an eye on the cost – the Official Receiver if you go bankrupt (see below) won’t care that you spent £100 on sheets and towels but £1000 would be different!
Options
a) you can go bankrupt straight away. Your credit record is already wrecked by the DRO, going bankrupt now may have no disadvantages for you that matter… your debt adviser can talk you through the things to think about. If you do this it is simple and quick.
If you had “only” £2500 say there would be no point in thinking about doing anything else but this – see an example here: https://debtcamel.co.uk/ppi-refund-dro-revoked/. And you can still choose to do this with more money – the extra money just goes to the OR.
b) you can use the remaining money after you have bought the essentials to make “pro rata” offers to your creditors in full and final settlement of your debts, so they all get offered say 18p for every pound that is owed to them. This is the fair way to divide up a pot of money, not to offer every creditor the same amount.
Read https://debtcamel.co.uk/debt-options/less-common/full-final/ for more about F&F offers. You may not be offering your creditors a lot, but point out your other option is to go bankrupt when they will get nothing. Your debt adviser should be able to help with these letters.
What not to do… from what you have said (renting, health issues, income only from benefits) there is no reason at all to consider an IVA where you have to make payments for 5 years. In your situation an IVA is a clearly worse option than bankruptcy.
David says
Thanks, I have been adivised that I can buy white goods and even a microwave. I intend telling the reciever that a microwave would help my back as I would not need to stand up for long periods, while I was cooking. I was wondering if I could buy two items say at £600 each as the washing machine and fridge that I have must be coming on having combined ages of 55+ years. They belonged to my mother who has been dead since 1994.
The fridge door handle has been broken for many years and the door has come open a few times due to the worn seals which has resulted in food being spoiled. (its so old I doubt that spare parts would be available). Even my cooker is a hand me down from my brother with broken knobs, and even though my washing machine still works, it must be costing me a fortune due to its age and lack of energy efficiency. I’m amazed that its lasted all of these years.
Finally, if I did buy a new fridge and cooker would it be wise to wait a few months before I put in for bankruptcy? Say waiting until they started to threaten me with court?
Sara (Debt Camel) says
If you intend to go bankrupt, then you should use the money to buy whatever necessities are needed first. Fridge, washing machine, cooker, microwave, bedding. There is no maximum amount you are allowed to spend. If the appliances you are replacing are very elderly, take photos of them to record that!
But having said that, go for reasonably priced items… – £600 on a washing machine or on a fridge sounds like a lot!
You don’t have to go bankrupt immediately. But there isn’t a lot of point in delaying it.
Your bankruptcy application can’t actually be refused whatever you have bought. The “worst” that can happen is that the Official Receiver may decide you have been reckless and should get a bankruptcy restriction order – talk to your debt adviser about this – you may decide you don’t care if you do get one!
David says
Thanks Sara, I have decided to keep my white goods costs to under £430 per item. I have also decided that it would be a good idea to pay an extra £15 per item so that the company who supplies me with these new goods deposes of my old ones. That way I have proof that I no longer have the originals.
My new aim is to keep some of the money so that I can offer my creditors the 18p per pound that you suggested. That way if they accept I will get to keep the £700 that I am keeping back for bankruptcy. However, if they refuse, I may then use a little bit more of the money to buy a new carpet, some curtains and pots and pans for my kitchen. The only thing that would worry me would be if the receiver took my passport, because once I am well, I intend to work overseas as an English teacher. Though because of my ill health, that will not be for several years.
Sara (Debt Camel) says
There is absolutely no chance that the OR will take your passport.
James Billingham says
I had my DRO accepted in Feb. I’ve now taken a second job which puts me up about an extra £100 a month. Although it may seem I’m now better off my outgoings for fuel ect have increased so I’m not any better off than i was before if that makes sense? Will this affect my DRO? Many thanks
Sara (Debt Camel) says
Talk to the adviser who set up your DRO and tell the Insolvency Service.
Finn says
Hello,
Thank you for a great informative site.
I am three months into a DRO. I am currently unemployed due to illness and attending hospital for treatment. I receive a basic benefit of 317 a month, on universal credit.
This morning, I received a letter from HMRC that I am owed £950 in overpaid tax for my last working year. I have yet to claim the tax as I am concerned it will revoke my DRO. Would this be the case?
Finn
Sara (Debt Camel) says
As the article above says, your DRO will not usually be revoked if you get a windfall of less than £1,000, but you do need to tell the DRO Unit about it promptly. Talk to your DRO advisor about this.
Finn says
Thank you for your quick response.
I have contacted the DRO unit and I am awaiting a response.
Deborah says
Hi, I had a DRO granted in June and have just changed from carers allowance to universal credits. Do I need to inform them of this change in circumstances, even though my income has now reduced by £30pw?
Also, I won’t receive my first universal credit payment for 5 weeks so I can take a universal credit loan of up to £1000 which I will have to pay back monthly. Am I allowed to borrow this money as I remember my DRO stating that I can’t borrow more than £500 without informing the creditor. Also, would this money be seen as income and therefore affect my DRO.
Sara (Debt Camel) says
None of this UC stuff will be a problem for your DRO. Taking the loan isn’t income. And the DWP won’t care you are in a DRO as they get the money back by deductions from your UC.
Christina says
Hi, my husband and I are working with CAP for our debts. He has just gone through bankruptcy, and I will be going through a DRO. When I have the DRO, if my husband’s boss asks him to work an extra day to cover someone who is off, would he be allowed to do so in return for say a supermarket/shop voucher instead of wages for the extra time, and would this affect us or be allowed? Otherwise it would take us over the £50 allowed per month.
Sara (Debt Camel) says
The “£50 a month” test is on you alone, not as a couple. Changes to your husband’s income will not affect your DRO unless they are large – a couple of extra days work a month for him would not even have to be reported to the Insolvency Service’s DRO unit.
Extra pay could potentially affect him if he is paying an IPA (a monthly payment for three years to the Official Receiver) but few people in bankruptcy pay this. If he isn’t paying an IPA at the moment, his OR is unlikely to be interested in odd days erratic overtime.
But do talk to CAP about this, it’s important you feel comfortable with how your DRO (and his bankruptcy) work and they are best placed to talk about your specific case.
Christina says
Thank you! He is paying £38 a month to the OR for 3 yrs. I will speak to CAP.
Lee says
Hello I have a DRO in place had it just over 3 months and received a letter today saying I’m entitled to £600 tax back from 2017/2018 will this affect my dro
Sara (Debt Camel) says
A nice surprise! As this is under a thousand pounds, it won’t affct your DRO provided you notify the OR promptly about this.
Soledad del Valle says
Hi
My DRO was approved in May 2018
I work on a part time hours a week depends on the availability. My income is between 800 and 1000 or less a month and I was not able to work for 3 months because of my health
I learned that I can claim hospital benefits from my insurance . Maybe about £500 .
Will that affects my DRO? Does insurance claims can revoke my DRO?
Another question in my mind is ..My hours of work varies so there maybe a month that i have extra income and there is a month that I dont earn anything how does it affects my DRO?
Thanks
Soledad
Sara (Debt Camel) says
Getting an insurance payout of £500 should not affect your DRO as it’s under £1000 provided that your tell the DRO unit about it promptly.
The Adviser who set up your DRO will be able to explain about your varying income, as this depends on the details of your case, but what you have said may well be ok.
Steph says
Hi am on dro at the moment and I have to go to universal credit , they said they let you have a advance payment would this effect my dro ???
Sara (Debt Camel) says
No. This is not “extra income”, it is just a loan that will later be deducted. No need to even tell the DRO Unit about this.
Linda says
Hi I’m on a dro at the moment , I got some Christmas money and decided to play some online bingo ( I don’t go out , I don’t smoke drink so lit was a treat to myself ) I won about 150 quid and have since over 3 months deposited it back to have something to do some evenings when bored , so obv on my statement there are a lot of deposit transactions but can clearly see I withdrew more than I played over 3 months . I don’t intend to play anymore was just using Christmas money worried now they will check and stop my dro !!!!!
Sara (Debt Camel) says
You can spend your money on what you like – your DRO will not be cancelled.
Of course if you had a big win it might be. But that would be the win, not the fact you were gambling.
Tori says
I am currebtly on a dro and my partner as left me. I need to apply for universal credit. Single mums. Will this affect my dro. Will i need to tell them?
Sara (Debt Camel) says
No it shouldn’t affect your DRO but yes, you should tell the Insolvency Service.
Elaine King says
I began my DRO on the 5th of March this year 2019. I get universal credit. I currently live in council accommodation, independent sheltered housing. I have been informed that the building I live in will be pulled down and I will be decamped to a similar building. The council will I have been told compensate me due to inconvenience. I’m not sure at present how much this payment will be . Will my DRO be revoked. I have also made a claim for PIP. If I am granted PIP I would get back pay. Would this also affect my DRO.
Sara (Debt Camel) says
“I have been informed that the building I live in will be pulled down and I will be decamped to a similar building. ” is this going to be soon? These things can often take a very long time.
You may be able to argue that the money you are given is for a “special purpose” as the article above says. That it is to allow you to get curtains, or white goods or something else essential in your new flat. Now your DRO has started, there isn’t much you can do except wait and see what happens and when, and then take it from there.
The worst case is that you are given a lump sum and your DRO is revoked. you can then use most of the lump sum to sort out your new flat, but keep enough aside to pay for your bankruptcy fees to replace your DRO. See this article https://debtcamel.co.uk/ppi-refund-dro-revoked/.
Getting backdated PIP should not be a problem for your DRO.
Jackie says
I was advised different about PPI from my intermediary. They informed me PPI is a classic example of coming into money that affects a DRO??
Sara (Debt Camel) says
I agree, you have to inform the Insolvency Service and what happens will depend on how much PPI you have received. Anyone in a DRO should not be considering trying to reclaim PPI.
Louise says
Hi
Im 6 months into my dro. Im self employed and have been offered a permanent role. My worry is if i go employed where im not claiming expenses then my income will be more.
Also the role would give me a little more income but it wouldnt be enough to pay back the 20k debt i had. Is the general rule that aslong as you have 50 quid left or less its ok or does it work on if your wages are up by percentage you have to inform the OR?
If your income was the same but in a diff job do you need to be informing them?
Thanks
Louise
Sara (Debt Camel) says
If your income was unchanged in a different job, you wouldn’t need to tell them. If your income is more but because you can’t claim back expenses, your expenses will also be more, then you should tell them but it won’t be a problem if you still meet the “less than £50” left rule.
I suggest you should talk to the debt adviser who set up your DRO before you decide whether to take this job offer. If the money is much the same, it’s often better to be employed as you will get paid holiday and sick leave and pension contributions…
Miguela says
I applied for DRO last May 2018
I wasnt abke to work for few months and no income for 3 months.
But since march I was able to work for more hours and my income have increase but still not enough to cover all my other expneses.
This is not actually happening on permanent basis there are weeks that I dont have work but few weeks I have work.
Will this affect my DRO
Thanks
Miguela
Sara (Debt Camel) says
It doesn’t sound like this will be a big problem but you need to talk to the debt adviser who set up your s DRO about this.
embob says
any advice please i am in the process of applying for a dro.i am due some money from a few payday loan claims that i applied for will this affect my dro.my debts are around £6000 and properly the claim money will be a few hundred
Sara (Debt Camel) says
As the article above says, a refund of a few hundred shouldn’t be a problem. But a refund has to be reported to the DRO unit. And if you have several of a few hundred you could be over £1000 in total, which may be a problem.
Sam says
Hey. What happpens if the dro ends and then couple months down the line you win some money or so on.. would you have to pay it back or no as it’s ended.
Sara (Debt Camel) says
After the DRO has finished it’s all yours.
(Actually it is all yours if you win a lot during the DRO year, it doesn’t get taken by the OR, but your DRO may be ended.)
It is technically possible to revoke (the legal term for cancel) a DRO when it has finished, but that requires the Official Receiver to go to court and it happens in only a couple of cases a year, usually where the person with the DRO has deliberately concealed something such as owning a house which meant they were never eligible for the DRO. It doesn’t happen just because afterwards you get a great job or inherit a fortune or win the lottery.
Sarah Harris says
Hi. My DRO was granted in December. I am in receipt of DLA for my son & have since found out I am able to claim Carers Allowance too. However I am wondering if this extra income (approx £30 per week) would affect my DRO.
Please could you advise.
Many thanks
Sara (Debt Camel) says
Hi Sarah, do you have any other income apart from benefits?
Sarah says
Hi. I don’t, my sole income is benefits right now.
Sara (Debt Camel) says
Then you will probably be fine, but talk to the debt adviser who set up your DRO before you apply for this.
Sarah Harris says
Right, ok. Thank you. So the advisor will let me know if my DRO will be affected? So I can then make the decision to apply or not?
Sara (Debt Camel) says
yes – good luck!
Sarah Harris says
Wonderful. Thank you very much!
X
Sasha says
Hi, I am considering applying for a DRO but I am also due compensation for personal injury for the sum of £3000. How will this affect me?
Sara (Debt Camel) says
You need to talk to the adviser setting up your DRO about this. What I am saying here is a general guide, but you need to check with your adviser how this will work in your case.
There are two types of PI compensation: special damages (eg loss of earnings, care and assistance, travel expenses, etc) and general damages (eg compensation for physical or mental injury).
Special damages are treated as assets – if your PI claim is likely to contain these it needs to be declared when your DRO is set up and when you receive the money if it is over the amounts mentioned in the article above, your DRO may be revoked.
“General damages” are not treated as assets. If you receive general damages during your DRO year your DRO will not be revoked if you use these for living expenses or keep the money in the bank until your DRO year ends. If you use them to buy a large asset such as a car, you may exceed the asset limits and the DRO may be revoked.
Kimberley says
Hi they chageing my benefits and i dknt think my benefits will keep going and im moveing a way and im wanted to start a claim
Sara (Debt Camel) says
Hi Kimbeley, Have a talk to National Debtline on 0808 808 4000. They can help you look at a DRO and decide if it’s good to apply now or wait until you have moved.
jason says
When calculating if I my debts are under the 20,000 limit, do you use the current value of the debt or do you use the total contract amount that it will reach in 1, 2 or 3 year time etc.. at current balance fall under the 20k but at the other i am over so not sure if i will be eligible. hope you can help and thanks for such a great site.
Richard says
I’m in a DRO until 14 August 19.
I have been unable to work for the last 2 yrs because of injury and illness resulting in being unable to pay my £13000 debts. I have a chance to cash in a small pension fund around £3000 but I’m afraid they will revoke my DRO if I do .
Please help
Sara (Debt Camel) says
You should not do this until your DRO has completed, see https://debtcamel.co.uk/is-your-pension-safe-in-a-dro/
Shelly says
Hi,
I am on a similar situation to you but mine will be a bonus. Did they cancel your DRO or take the money?
Darren Harvey says
Hi I’m in a DRO until February 20. I’m am currently seeking part time work. Would being in employment have any impact on my DRO.
Sara (Debt Camel) says
yes it might. But if you are getting benefits at the moment, then these will probably drop when you start work? And you may also pick up extra expenses eg transport to work. So unless the part-time work is well paid, you may not end up being a lot better off each month?
I think you should talk to the debt adviser that helped set up the DRO – they will know more about the details of your situation and can give you more specific advice.
Rachel says
I applied for a DRO October 2018. It will end on 19th October. I am switching to UC as my son turns five in August. Because I realise I need to find employment I have been offered a part time, term time only role of 21 hours a week. They want me to start work on 16th September.
My UC switch from legacy means I won’t get any money for the whole of September until the claim is processed. The company pay on the last working Friday so I’d be paid for two weeks work during the last month of my dro. This will take me over the £50 limit. Would my dro be revoked in this instance?
Sara (Debt Camel) says
I would be surprised if your pay takes you over the 50 a month limit, because your benefits will reduce. You can also get a UC advance in September to get you through that month and then that will be deducted from the next few months UC. And with a child in school your costs such as uniform may go up.
I suggest you talk to the adviser who set up your DRO as they will know the details of your expenses.
Rachel says
My income, with benefit reductions accounted for will increase by £400 pcm. I can take council tax and some fuel out of this so around £160. This will still leave me with£240.
Sara (Debt Camel) says
Talk to your adviser. I would be surprised if a single parent, getting UC and with a part-time and term-time only job did not qualify for a DRO. But your adviser can work through the details with you.
Rachel says
Hi, I’ll do that. I’m just so near to the end of the 12 months and it will be for the last 4 weeks that I’ll have been working so I’m desperate for it not to be revoked.
Term time only and part time is so rare where I live and I really don’t want to have to pass the job by because long term it will be better.
Jhon says
Hi Sara
My DRO has 3 months to end.
My budget is -£330.
I have applied for universal credit What I am receiving I am still under 50 pounds left
Do I have to inform my advisor as I am not exceeding the 50 pounds
limits
Thank you
Sara (Debt Camel) says
You have to inform the DRO Unit that your income has increased. It doesn’t sound as though this will be a problem for your DRO, but if you talk to your debt adviser first they will confirm this.
Jhon says
Hi Sara
sorry I didn’t understand
Is going to be a problem for me?
Also, can I apply for bankruptcy if my DRO revoked
Thanks again
Sara (Debt Camel) says
You should always tell the DRO unit if your income has increased, even if you don’t think this will be a problem for your DRO.
From what you have said, I don’t think getting Universal Credit will be a problem for your DRO, but if you talk to your debt advicer they know all the facts of the case and will be able to reassure you.
Yes if your DRO is revoked you can apply for bankruptcy. I think that is unlikely!
Kirsty Joynes says
I have a dro in may this year. Ive just been awarded dla for 2 of my sons each 587 back pay . I also got told i’ll be getting the disability element of child tax credits and back pay of 1,170 would this be revoked as surely its a disability element to help cover costs? Thank you
Sara (Debt Camel) says
I asked Kirsty and she says this did not affect her DRO.
Louise says
My brother and I are co-owners of our family home but my elderly mother still lives there (we do not). The change of ownership was made years ago when my father was still alive. The way the solicitor has drafted the paperwork means that she gets to live in the house until she dies, we cannot sell it.
With this in mind, would I be able to apply for a DRO as I qualify in all other aspects?
Sara (Debt Camel) says
Sorry but you need to talk to a debt adviser, who can look at the actual paperwork. I suggest you go to your local Citizens Advice.
Sharon Enderby says
I’m going mad with worry so hope you can help my dro started jan 30th and in March I had £442 bonus from work which I told os about. In December I will be getting £300 loyalty award for 25 years service and in January 17th (2 weeks before dro ends) I will be getting back pay from a pay rise that’s been negotiated since April this year. It’s going take
Me probably £250 over the £1000 limit. I’m still not going have more than £50 left as everything has gone up, bill wise. I’m so worried they revoke my dro it’s making me ill. Hope you can help
Sara (Debt Camel) says
I suggest you talk to the adviser that set up your DRO. The Insolvency Service do have some discretion about what they do.
Nick says
Hi, my DRO completed on the 9th March 2019…in July 2019 Barclaycard agreed to pay £357 compensation against a FCA claim I never made. They have declared they will keep the money and would reduce their debt. They have not reduced the outstanding balance, so I am asking they pay the compensation to me as the moratorium period has ended. Am I understanding this as correct or are they entitled to keep it despite the money coming to light after the 12 month period?
Sara (Debt Camel) says
Well you can ask them… and many debt advisers think you would have a good case in court as legally the debt they are “reducing” no longer exists.
However the Financial Ombudsman has usually decided in PPI refunds to people who have had a DRO or an IVA that it is fair for the firm to do this, because otherwise you are getting a refund of money you haven’t actually paid.
Lois says
Hi – I currently have a DRO which will be up in May 20. I am living with my sister and am in receipt of Universal Credit. I don’t pay any rent to her but need to. I am worried about getting a job but am looking for a part time position that will allow me to pay enough towards rent and heating, etc, but not enough to take me over the £50 allowance. I am thinking about 20 hours a week. I am really worried though, just incase my DRO is revoked if they don’t agree, Family are being patient, but that wont go on for ever and I can’t get any support from benefits for rent as it is family! What is your advise, please.
Sara (Debt Camel) says
I think you should talk to your the adviser that set up your DRO. If your sister writes you a letter saying she is in financial difficulty and can no longer allow you to live rent-free but needs a contribution of £x per month, pointing out that if you weren’t there she could get a lot more by renting out the room, that may help.
Lauren says
I was wondering if anyone could help.
My DRO started in September this year, however I have had a phone call from the DWP today saying that they are awarding me PIP (personal independence payment) for my disability, including a back payment for the last 18 months which has accrued to around £6,000.
I’m terrified that my DRO will now be cancelled. My main source of income is Universal Credit although I also get some money from student finance (I’m doing a degree). My debts are around 16k, so even with this lump sum, I wouldn’t be any better off if the DRO was revoked.
Can anyone advise me on what to expect?
Sara (Debt Camel) says
A backdated payment of PIP should not be a problem – talk to the adviser who set up your DRO and they should be able to confirm this.
But you MUST report it to the Official Receiver.
Lauren says
Thank you Sara.
My partner is now eligible for the carer element of our joint universal credit claim.
This also means that we may be entitled to a backpayment of the carer element for the last 12 months, which is a total of £1920… Which raises another question.
Can we accept this money? It’s not for Pip, however it is pip-related.
Thanks again!
Sara (Debt Camel) says
Talk to your DRO adviser!
Jade says
Hi my DRO got accepted Oct 30th and in my DRO was my tax credit over payment, but because they now can’t take the over payment from me anymore they’ve stopped reducing my payments from this coming Friday, I was getting £43 to now £84 a week. I work however currently on the sick for the last 4 weeks and next four weeks. And will be on the sick for a further 4-6 months when I have brain surgery next year. Also I learnt all of the staff at my job are now being put to contract hours which is 12 hours on NMW. So my income will still be lower than when I first went into my DRO. Will the extra tax credits effect my DRO?
Sara (Debt Camel) says
I’m sorry to hear of your health problems and I hope the surgery goes well.
What matters for your DRO is what happens to your income overall. You will need to tell the OR that your income has changed, but as it has dropped, this shouldn’t be a problem. Talk to the debt adviser who set up your DRO if you are concerned.
Becki says
Evening, my mum has recently won her pip tribunal after losing her enhanced Dla completely. Her DRO is due to finish on Feb, she will be backdated her pip and possibly disability premium (waiting on application) will this affect her DRO? We Will inform them when we know the outcome of disability premium.
Ian says
I’m currently applying for a DRO, due to not working for most of 2019 due to depression, being bullied in a job, then getting sacked after raising the bullying (I’d only been there 3 months so no recourse) I’ve spent most of the year recovering from a breakdown and also breaking my back so I’ve ended up on Universal Credit.
Currently I’ve got no spare income, but I’m hoping to go back to work as soon as possible, but only part time, so I can get back to work, earn money and concentrate on my health.
If I get a DRO and then I get a part time job, and say my spare income is between £60 and £90 per month, would a DRO be revoked based on debts of £13,000, given that it’s just over the £50 spare income and the difference isn’t enough to pay off my debts in a reasonable time
Thanks
Sara (Debt Camel) says
That sound a very tough year, I hope getting a clean financial start can help you on the road to better mental health.
If you are on UC now and get a part time job, you will be better off but perhaps by not as much as you think as your UC and possibly council tax support as well will reduce. You may also have extra expenses eg travel to work. Your local Citizens. Advice can help you look at how your benefits may change if you get a job offer. And your DRO adviser can talk about whether that will impact your DRO or not.
Liam says
Hi
My DRO has completed but I’m paranoid about a DRO post moratorium revocation.
My income didn’t increase nor did i break the conditions of my DRO but I recently applied for a form of credit with a creditor which was on my DRO, I got a new job during the period of my DRO which wasn’t a pay rise just a change of role.
So on my application to this creditor under employment i stated my pay and my date of employment (which was a date 6 months into the moratorium )
Will this flag up on the creditors system as a change of circumstances for example and lead them to think oh we should raise this as a dispute/query etc to the official reciever and then cause them to contact me ? I worry as I am not in a good place at the moment and don’t want any undue stress even though I know the revocation wouldn’t happen due to the income having not changed – have I caused an inevitable dispute to be raised from the creditor?
I didn’t get accepted for the credit I applied for anyway and i believe it was just a soft credit check but either way will this have flagged up somewhere?
Sara (Debt Camel) says
Post moratorium revocations are VERY VERY rare, the Insolvency Service has to go to court to get one, there is no way it would waste time looking at this sort of issue if the creditor was mad enough to raise it.
And creditors are in the business of making money. DROs are just one of those things, a fact of life for lenders. They are not going to waste staff time trying to conduct a vendetta against you.
I suggest you sleep easy.
Rebecca says
Hi,
I’m in the middle of applying for a DRO and i’m currently on a 0 hour contract, due to the fluctuations in income and needing to pay rent i’m putting myself forward for a medical trial which will pay £3000 if i’m successful, which I need to pay rent and to move to a cheaper accommodation and will need a deposit for this on top of rent. Am I better to wait for this payment to go through prior to applying for a DRO? Otherwise this could leave me in a lot of trouble in terms of housing. My debts are close to 20k and so the money left over once moving wouldn’t put a dent in the debt.
Sara (Debt Camel) says
I suggest you need to talk to your DRO adviser about your situation. If there is a delay and your debts increase to over 20k you will no longer be eligible for a DRO. But if you start a DRO you would have a problem getting a 3k payment.
Ffionpearl says
If you get the lump sum of money before you do your DRO ( and I would suggest waiting) you could always use it for rent etc and if your debts are just over £ 20k you can pay a pro rata amount to each one in order to get below the debt parameter again. That way you could effectively do both: collect the money and have the DRO. You would need to ensure you had no more than £1000 left before submitting the dro. The reason for the pro rata offer is because you can’t prefer a creditor or creditors . Your approved intermediary (adviser) can calculate the payments. However why do you think the debts are increasing? Have they not defaulted? If not ask for a breathing space. Then again if you are over by £680 or more you could go bankrupt as the fee is £680 and covers all qualifying debts you would have to use some if your lump sum for the fee
Morgan says
Hi
I dont no were to start basically my ex has left me in debt took a loan out in one of my bank accounts and also did a one of universal credit in my other account.
I have recently had to give up work due to health reasons and had to go on universal credit this is in my main account I also had a advance to help me get through the month I was paying the loan of when i was working and also paying as soon as I received universal credits …
Morgan says
credits … the debts with universal credits when I went on this money was being taken out a month I was getting 564 a month an couldn’t afford to be paying them and plus other Bill’s coming out so I’ve had to get a DRO it has been approved but I’m worried that if a friend or family member borrows me money each month it be at least 100 – 200 if an when I need it due to still paying bills and food my pay is monthly my main account is tsb were my universal credit goes in and the loan was with hsbc will I get in trouble if I get borrowed money of friends an family
The loan from hsbc was 4000 plus vat lead to 600 i was paying 117 a month the universal one of payment was 1,500 or 1,600 and as I didnt want a criminal record they added 700 odd on top to make it 2,220 I was paying 17 pound back on that and the other one I got for the advance was 694 was paying 57 back a month my DRO started on the 31st jan my main account is what am worried about do they check that often as that’s were all Bill’s come out of and my universal credits paid into ect hsbc was just another account to be honest
Sara (Debt Camel) says
Has a DRO been approved, if so, who set it up for you? Were any of your debts not included in the DRO?
Grace says
Hi is someone there to answer my question
Sara (Debt Camel) says
what is your question?
Watson says
Hello,
Just to clarify the important limits of DROs.
Do the total value of assets mean literally everything in your home as well as money?
For exampe TVs, Computers, other electronics, and cash below £1,000 ?
Thank you,
Dean.
Sara (Debt Camel) says
It doesn’t include essential normal domestic items such as beds, washing mashines, fridges, clothes, carpets etc. And everything is valued at its second-hand value. Your tablet, TV and phone are probably worth a lot less then you paid for them!