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 ‘revoke‘ your DRO. That is the legal term for cancelling your DRO so you are back owing your debts.
But this doesn’t always happen – the OR has discretion about whether to revoke a DRO. And it is really rare – only one in a hundred DROs are revoked.
If your DRO is revoked, you may simply be able to apply for another one if your situation changes and you again meet the criteria.
Exception – extra cost of living payments in 2022
You do NOT need to tell the DRO Unit if you receive any of these including:
- £150 because you are in Council Tax band A-D;
- £650 (paid in two parts in July and the autumn) because you are on some benefits;
- £150 if you are receiving a disability benefit;
- £300 extra payment if you are a pensioner who gets the Winter Fuel Payment;
- £400 reduction in your electricity bill..
Contents
The DRO limits on assets and spare income
(The DRO limits were increased in June 2021. These are the new ones.)
DROs have two important limits which matter if you get some more money:
- you cannot get a DRO if you have more than £75 ‘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 £2,000. (This is second-hand value, it doesn’t include normal household goods and clothes, you are also allowed a car worth up to £2,000 in addition to this.)
If you get some extra income each month this may take you over the “spare income” limit. If you get a lump sum of money or a valuable gift. 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.
“My income has increased”
You usually need to inform the DRO Unit of any increases in your income. The exception is that you don’t have to tell the OR if one of your benefits has gone up, usually in April, because of a small inflation rise.
It is unlikely that small increases will result in revocation unless you were close to the surplus income limit when your DRO started.
Don’t forget that you have to pay tax on a pay increase and your pension contributions may rise. Also any benefits such as Universal Credit, Child Tax Credit etc may be reduced if you are earning more. So you may not be much better off.
Your costs may also have gone up:
- for example, if your benefits went up because you have had a baby, you will have new expenses to do with the new child;
- in 2022 inflation is high so a lot of other expenses, from food and petrol to mobiles bills and energy costs may also have gone up.
A new Income and Expenditure assessment may be needed to show whether you are actually left more money after your extra income and increased expenses are all taken into account. Your advisor will be able to help with this. Then you may be able to tell the IS that your income has gone up but explain that here is an income & expenditure sheet that shows you still do not have more than £75 a month spare income.
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.
If you aren’t sure whether you should tell the DRO Unit,
talk to the adviser who set up your DRO as soon as possible.
“I have received some money”
You have to tell the OR about extra money
In a DRO, the money you receive is not taken to pay your debts, unlike in bankruptcy or an IVA.
But getting more than £2,000 may mean that Insolvency Service decides to cancel your DRO, leaving you back with your debts.
You must inform the OR about any money or property you receive. Update: except for the additional Cost of Living payments people are getting in 2022 – you don’t have to tell the DRO Unit about them.
This includes:
- a bonus from work;
- a valuable gift;
- money or property you inherit;
- money received from claims such as PPI or 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.
Do this as soon as possible, even if you think the money is going to be covered by one of the situations mentioned below.
And you should inform them even if the amount you receive is less than £2,000.
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.
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. Here your DRO will not be affected even if the lump sum is large.
If you get a lump sum from backdating of other benefits, this is treated as getting a lump sum of money. If it is more than £2000, it could lead to your DRO being ended.
A settlement for a Personal Injury
Sometimes this will not affect your DRO even if it is large. The DRO guidance says:
Personal injury payments received during the [DRO year] 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
What matters here is the date the person died, not the date you actually receive the money. See Inheriting money when in a DMP, DRO, IVA or bankruptcy which looks at this in more detail.
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.
How to contact the DRO unit
When your DRO started, you will have received a notice from the Official Receiver confirming this.
That notice has the contact details for the Official Receiver. You should use these details to contact them.
If you can’t find the notice, you can email the DRO unit at DRO.Unit@insolvency.gov.uk or phone them at 0300 678 0015.
DRO revocations are rare!
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 total 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. There are less than ten a year.
My DRO is being revoked – can I get another DRO?
If your DRO is being revoked, you need to find an alternative way of dealing with your debts.
Obviously if you have inherited a lot, you can pay all your debts off! Or you could use the windfall to make full and final settlements on your debts.
Another option is a second DRO, if your situation changes so you again qualify. For example if you had a windfall or an inheritance of say £4000 and spent more than £2000 on essential expenditure, then you would again be under the allowed asset limit in a DRO.
(Until recently, it has not been possible to get another DRO soon after one has been revoked as you can’t have more than one DRO in six years. But in 2021 this was challenged in court and the judge overruled the Insolvency Service on the basis that after the revocation the previous DRO no longer existed.)
If you want a second DRO, go back to the adviser who set up the first one and talk them about this.
The other main possibilities are:
- a Debt Management Plan; or
- bankruptcy. 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 thinking about a DRO
When you talk to a debt adviser about a DRO, 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 expect to be able to get a new job – then you probably shouldn’t thinking of a DRO.
- if you think you may get a lump sum in the next twelve months 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.
- you should avoid starting a DRO if you expect to retire and get a tax free lump sum in the next year.
For all of these “wait and see” situations, look at making token payments instead until you see how things turn out.
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
Fred says
Hi. I am thinking of applying for a DRO however I work in hospitality and my hours are business dependent. One month I can earn 900, and then next I might barley scrape my rent. This means I have to be careful with my money and sometimes It looks like I have spare income when in reality I am preparing for the next month.
Will this be a problem when calculating my income? how does one figure out the fifty pounds spare when you can never be sure of the next months income? Also with covid about I may not have a job one month and be back at work two months later.
Any hep would be appreciated.
Sara (Debt Camel) says
DROs can be possible with very erratic income. I think you need to talk to a debt adviser who will look at your variable income. If you are self employed talk to Business debtline, if employed on a zero hours contract, talk to National Debtline on 0808 808 4000.
Natalia says
Hi,I am on furlough and company that I work for will not support my flex.hours after furlough finishes so most likely I will have to give up work .I have received extra income this month ,student grand, and I am worry that my DOR will be cancelled. I have 2 incomes but I am not touching student loan as later I will need it to pay my bills .I do not know what to do now .My DOR will be cancel now and I will have to apply again later ?I would appreciate any advice .
Sara (Debt Camel) says
You need to talk to the debt adviser who set up your DRO. Student loans are treated differently. Please get some help so you know where you stand.
Natalia says
Thank you !
Jessie mill says
I have a debt relief order (2 months in) can I apply for a budgeting advance from UC? Up to £500? Do I have to notify them
Sara (Debt Camel) says
Yes you can. No you don’t have to notify them if you are asking for less then £500.
Tanya says
Hi, i’m a p/t supply TA in school with regular hours until Christmas. I also top up the hours with teaching. The money I earn varies a lot and i will earn nothing in the holidays. I’m thinking of a DRO as I meet the criteria – however what if the income would go over the spare £50?
Thanks
Sara (Debt Camel) says
You can have a DRO with an erratic income. I suggest you talk to National Debtline on 0808 808 4000 who will look at your income and the rest of your situation and say if you qualify.
Jonathon says
Hi, i received a DRO in august 2017, and it ended exactly 12 months later. However there is a possibility that i will be receiving a large amount of money from the sale of a house owned by a late family member. Will this have an impact to the DRO that i had or the accounts that it was requested to help with? or can i just collect the money and carry on since the DRO ceased?
Sara (Debt Camel) says
Your DRO has completed, your debts no longer exist and any inheritance is all yours.
Jonathon says
So I have no worries about the people I got the DRO from coming after the money?
Sara (Debt Camel) says
None. Enjoy!
Jonathon says
Thank you.
Charlie Turner says
Hi,
I’ve recently started a DRO and now I’m looking to get into employment again.
I usually work though agencies and on zero hour contracts so my wage differs from month to month.
I’m just wondering how can I explain a varied income that won’t always be the same to the OR?
Weatherman says
Hi Charlie
When you say you recently started a DRO, do you mean an application or that the application has been accepted & the moratorium has started?
The DRO Intermediary (who submits your application) and the OR should take a 3-month average of your earnings. If you have a ‘good’ 3 months before/during the moratorium and earn enough that it takes your disposable income over the £50 a month average threshold, then it might mean you don’t qualify or that the Order is cancelled. It’s also worth noting, however, that there’s no requirement on you to work as much as you can during the moratorium period – so you could just make sure don’t earn too much in that time.
Magda says
Hi
I have dro since 3months. My income might slightly increase as I will get back to work part time but same time my expenses will rise too. Will my dro be revoked?
Sara (Debt Camel) says
From what you have said, that sounds unlikely. If you are getting any benefits they may also fall a bit?
Talk to your DRO adviser about this.
M. Heath says
I get working tax credit and Martin Lewis says we will all get extra £500 in April
Will this affect my DRO which has only started this year.?
Weatherman says
Hi,
It shouldn’t do – but you should inform the Official Receiver anyway.
This amount is not treated as taxable income (so doesn’t affect other benefits, nor do you have to declare it on a Self-Assessment tax form). And the increase to the weekly amount of Working Tax Credits in April 2020 did not affect ongoing DROs. I haven’t been able to find confirmation that the same is true for this lump sum, but it has clearly been designed to be equivalent to a further six months of a £20-a-week increase. So I think it’s very unlikely it will affect your DRO.
Even if this is treated as a ‘lump sum’, then because its value is under £1,000, your DRO won’t be revoked if you have notified the DRO Unit promptly and the money is less than half of your debts. So to be on the safe side, I would tell the DRO Unit when you receive the payment, but it won’t affect anything.
carmen says
Hello,
If universal credit has gone up due to April’s new rates, would i need to inform the DRO unit? gone up by around £5 only. So not like its a big sum. Would this affect my DRO.
Sara (Debt Camel) says
In theory you need to tell the DRO Unit of increases in your income. In practice they won’t care about this change in UC rate. Also you may have had other expenses that have also gone up, eg council tax or utilities?
You can just send the DRO Unit an email – there seems little reason to worry about this affecting your DRO.
Yasmin says
Hi,
Quick question. My DRO was approved on 30 March 2021. However this May 2021 I may get an increase in my Universal Credit of about £500 due to becoming the main carer of my two children. Should I inform the official receiver of this increase in my Universal Credit? The increase will not actually leave me with any money left as this money goes straight to my Children and I won’t be spending it on myself or anything.
Should I worry about this increase or should I call Stepchange and let them know ?
Thank you
Sara (Debt Camel) says
Yes you should tell the official receiver about this increase but also explain the reasons – because your expenses have increased you won’t actually have any extra spare money each month. If you are worried about doing this, talk to StepChange first.
Roxanne says
I’m on uc and looking to get a DRO ASAP will it affect my claim at all
Sara (Debt Camel) says
A DRO will not affect your Uc.
Craig says
Hello, my income is approx £33k/year can I still take out a DRO if I fit all the other criteria?
Regards
Sara (Debt Camel) says
yes, there is no limit on the income. Talk to an adviser asap, I suggest National Debtline on 0808 808 4000.
Craig says
Thank you.
Do you know how it works regarding living with a partner and taking in to consideration their income to the household even though all the debt is mine?
Also will I need to give them copies of my wage slips/bank statements as I currently don’t have any of them.
Thanks
Sara (Debt Camel) says
It is normal for your partner’s income to be taken into consideration to determine how much of the bills each of you should pay. So if you earn twice as much as your partner, you would be expected to pay 2/3 of the rent, utilities, council tax etc.
It’s up to the debt adviser you talk to what they want to see by way of pay slips, bank statements etc. presumably you can get these if you need them?
I think you should talk to a debt adviser now. A DRO could be perfect for you, or you may not be eligible, or there may be better options – if you have big enough debt problems to be thinking about a DRO then you need good advice immediately. I suggest you phone National Debtline on 0808 808 4000.
Craig says
Ok thanks.
I can get the required documents.
I have debt to a family member would this have to be added to the DRO or can I keep this separate?
Regards
Sara (Debt Camel) says
all debts have to go into the DRO. Of course there is nothing to stop you making gifts to the family member later on… but when your DRO adviser works out how much “spare income” you have each month, payments to your relative will not be allowable as expenses.
Mj90 says
I’m looking to take out a DRO however I have a student loan/grant scheduled for August
£1500 grant
£350 maintenance loan
I will not get any other money from student finance until October 2022
I’m not sure how this is taken into account, If it will have a detrimental impact on a DRO getting approved.
Sara (Debt Camel) says
I don’t think it will be a problem – DROs for students are pretty normal. Talk to a debt adviser such as National Debtline on 0808 808 4000 about your situation.
Paul says
Hi Sara … I completed a DRO that went through on 14th April 2021. Friday I received notification that I was due a tax rebate that I was not aware of at the time of doing the DRO and is due to be paid back to me in my bank for £1299.99. I have contacted the DRO as was the right thing to do but I have also stated that I was not aware I would receive this. My salary has not changed and I do not expect another lump sum before my DRO ends or a salary change. I have also said that if they remove my DRO then it will put me right back into the same situation I was trying to eleviate from as I had balances over £14k in total being included. I have done as they have advised but what are now the outcomes of being honest with the DRO?
Thanks
Sara (Debt Camel) says
So the DRO Unit will make a decision as to whether your DRO should be revoked.
Can you let me know what happens?
If it is revoked, then your simplest option is probably to apply promptly for bankruptcy – the tax rebate giving you the money to pay the bankruptcy application fee. Talk to the adviser who set up your DRO to see if you have any other sensible options.
jimbob says
I have discussed with you previously about inheriting while in a dro. I got it wrong about amount. Apparently the amount literally matches the debt in the DRO. Does that mean you are legally obliged to clear it
Sara (Debt Camel) says
No. But her DRO will be revoked, so that would probably be a sensible option. What sort of debts were in her DRO?
jimbob says
3 credit cards and 2 store cards. 5.6k on ccs and 600 pound on scs. Main reason for asking as mentioned before some home improvements desperately needed. Income and expenditure very close and take many months to save enough
Sara (Debt Camel) says
I think she (or you) need to talk to the adviser that set up this DRO about her full situation. She could look at making dome settlement offers. But she needs someone to help her decide what to do in detail and that person is not me.
jimbob says
One other query i have understanding what i read. A CAB piece talks about creditor actions upon DRO revoked. Comments about interest lost being applied. My example could this be right. Vanquis credit card. Roughly before dro interest and charges 130 per month. Probate say takes 6 months. Could that mean possibly 800 pound being added to balance when they pursue you again
Im probably over thinking.. Probably trying to cover too many basis too soon
Sara (Debt Camel) says
It would be unusual for a credit card to do that.
But she does need to wait and see how this goes. There is always the option of spending some of the money on essentials and going bankrupt.
jimbob says
Thanks for that. As you say just wait now as it could be nearly a year away and then follow our advisers advice. If all the cards followed a procedure of adding lost interest could be 1000s more. Its just the article seems to come across as though they do add lost interest. Thanks again for all the great work and help you have been to me and many others
Sara (Debt Camel) says
If all the cards followed a procedure of adding lost interest could be 1000s more.
That is very unlikely to happen.
jimbob says
Just managed to ask the CAB. They advised creditors would just start to re-apply charges from date of DRO revocation.
Sara (Debt Camel) says
That sounds much more likely.
jimbob says
Unfortunately they have now totally changed the goalposts. Apparently the dro will bbe revoked from date of death. They say it is classed as an asset now not when money received. CAB suggest disclaim. Stepchange suggest that is illegally disposing of asset to avoid paying your debts. Really getting confusing and scary now
Sara (Debt Camel) says
No they haven’t changed the goal posts – the date of death always was the relevant time as I said before https://debtcamel.co.uk/proposed-dro-changes/comment-page-1/#comment-424435. And I said there that she can disclaim…
But I don’t understand why you are panicking, I thought you had accepted that the DRO will be revoked and it was a question of what she should do next?
Sarah says
Hi Sara, just wondered if you could help my partner has an iva but I think a dro would be a better option for him,but my only concern is twice a year he gets a bonus from work which we use for Christmas and birthdays the amount differs each time as its all depends on profits for the company he works at the money could be any where upto £4000 for the year, do you think this would be a problem for him, he would tell the adviser in the beginning when applying for the dro. Thanks for your help.
Sarah
Sara (Debt Camel) says
If he receives more than £2000 during the twelve months of a DRO it is very likely to be cancelled.
How far through the IVA is he?
Sarah says
Hi, ok thank you. He’s 15months into his IVA. I just don’t feel its the right option for him,someone phoned him from a company and just went ahead with it, they’ve already increased his payments from £101 to £131 but when you look at the calculations they have done it shows he only has a £100 a month left after paying everything plus the my money they took in to calculations us wrong by £22.20 a month its not alot but it is if you don’t have it.
Thanks for your help
Sarah.
Sara (Debt Camel) says
How much will they be taking of his bonus?
He should object if your money is incorrect.
Sarah says
In the last phone call they said they will adding on £400 to the end of term so if that goes on every year we are looking at an extra £2000 at the end!
Yes he is going to phone them about it.
Its with a company called creditfix have you head of them?
Sarah
Sara (Debt Camel) says
how large were the debts going into the IVA?
Sarah says
It was just under £20,000.
Alice karlo says
Hi I got a debt relief order in oct 2020. I have had a housing disrepair claim finalised for £850 that is supposed to be reaching me as soon as the repairs are carried out in September 2021. Will this effect my dro ? Thankyou
Sara (Debt Camel) says
You do need to tell the Insolvency Service about getting it, but that should be OK if it is the only lump sum payment you have received during the DRO.
Hopefully that will be a good end to the DRO year for you with your debts gone, your repairs carried out and a bit of money in the bank!
Sandra says
Hi, I have a DRO since beginning of August but just been notified I will be getting a back payment from PIP which will be about £3000.
This lump of money is very unexpected, receiving it after appealing to tribunal and I never thought i will be awarded PIP as its been going on for more than a year now… and I understand PIP back payment shouldn’t affect DRO? However what are the chances DRO will be revoked as PIP payment is more than £2000?
Total debt on DRO is £9000. Thank you
Sara (Debt Camel) says
if this backdating is ONLY for PIP, then there should not be a problem. As the article above says:
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.
But if some of it is for extra disability premiums you will now get on other benefits because you are getting PIP, then that money is considered as a windfall (don’t ask me why, the rules are not sensible, I am just saying what they are.)
If you are “only” getting £3,000 back, then my guess is that most of that is for PIP itself… In which case you should probably be OK if the non-PIP part is less than £2,000…
BUT you need to tell the DRO Unit about this extra money even if it is only for PIP. Talk to your DRO adviser if you aren’t sure about your situation or what to say to the DRO Unit.
CJ says
Hi, please can you help? I am 1 month into my DRO, however the company I work for have been taken over and our salaries are being reviewed – it looks like I might be getting an extra £1500 gross per year. Will this extra money affect my DRO? My total debts are £17,000.
Thanks, CJ
Sara (Debt Camel) says
When your debt adviser drew up your income & expenditure, do you remember how much they thought you were left with each month?
Are you getting any benefits at the moment?
Are your energy bills going to increase?
Jamie says
Hi Sara
I’ve been in my DRO since May this year but have been made redundant as the company has gone insolvent.
I’m entitled to about £4,500 in redundancy.
Will be DRO get revoked due to this.
Thank you.
Sara (Debt Camel) says
Can you say something about your situation? How large were the debts that went into your DRO? Do you have any other debts? Any rent arrears you are still paying?
What is your chance of getting a better paying job now?
Jamie says
Thanks for your reply. Very appreciated.
I was officially made redundant on 10 Sept and have applied for Universal Credit.
I live on my own, debts approx 15K that went into the DRO. I have no debts now and no rent arrears. Should be able to get a job on roughly the same income but currently looking.
Jamie says
Hi Sara
I have let the OR know of my situation.
If my DRO was to be revoked could I apply for Bankruptcy from the proceeds of my redundancy?
Would the remainder of my redundancy be taken from me at that time?
Thanks
jason says
i worked for my company for 18 years and had to take redundancy , £11000 my dro was for 18k so if i was to inform the DRO team obviously the amount received is less than the debts, so what would they do? take all of it and pay off my debts and leave the dro standing, or would they leave me with 2k as asset , also i didnt think i needed to tell them as it was my money for working for 18 years, how would they know if i didnt tell them?
Sara (Debt Camel) says
You have to tell them about the redundancy, it is a criminal offence not to.
The DRO Unit has discretion about what to do, but as you are getting such a very large amount it is almost certain that your DRO would be “revoked” – this means it is cancelled, leaving you back with the debts. You should assume this will happen.
They cannot take the money – they do not have the legal right to do this, it isn’t going to happen.
what sort of debts were in your DRO?
How long will it be before you can find another job?
Jason Tedford says
2 credit cards, 2 loans and a 9 k bank loan
Jackie says
Hi Sara,
I have a DRO and February 2022 will be 12 months. I was very unwell during that period hence the DRO. However I feel a bit better & have applied for some jobs. I got a job offer for 40,000 pa but worry my DRO will be revoked if I take the job. If it is revoked, my debts will be high and might not have enough to live on. Is it advisable to just leave the job offer and take on employment after Feb 2022? Thanks!
Sara (Debt Camel) says
40k sounds like a lot. You could talk to the adviser who set up your DRO, they will know the details of your situation, but you may well have moe than £75 a month “disposable income” so your DRO may be revoked.
You may decide you would prefer not to take this job. Partly it depends on how much you want *this8 job – if it’s your perfect job and it will be hard to get another then turning it down may not be a good idea and you can talk to your debt adviser about how to manage the debts if your DRO is revoked.
Partly it depends on your heath. “A bit better” are you sure you are well enough to go back?
jacqueline says
Thank you for your reply, very much appreciated. I have spoken to the company that handled the DRO and they advised to wait until it the DRO is discharged. So I hope to wait it out and look for alternative jobs in the meantime. Thanks very much
jimbob says
Spoke before about my daughter to inherit during DRO. Outcome is Insolvency Service to revoke soon and back to creditors. One of which had previously upped and upped credit limit to unaffordable levels. Can we consider making one of these complaints when we deal with them again.
Sara (Debt Camel) says
How large was this debt?
What was the total of her debts in her DRO?
How long had she had this account?
jimbob says
DRO total debts 6.3k. Credit card a/c opened Feb 2017 with initial limit 300 pounds. By May 2021 credit limit was at 3.5k. plus interest 3.7k at point of DRO granted. Her income was PIP and ESA benefits.
Sara (Debt Camel) says
was she only paying the minimum amounts to this card when they increased her limit.
jimbob says
Yes. After each increase quickly to the max. Then minimum payments and keep using difference between limit and interest. Consequently debt never decreasing. This was every month. Company policy said they saw this as being an excellent customer and well run account.
Sara (Debt Camel) says
Company policy said they saw this as being an excellent customer and well run account.
does that mean she has already complained?
jimbob says
No sorry. This is what they said with the increases. They could see account was always at max but kept increasing limit.
Just a side note. Many many comments out there about this company. Customers keeping well within credit limit and good payers refused increases for emergencies. Those always at their limit keep getting increases thrown at them.
Sara (Debt Camel) says
oh don’t pay any attention to that. get her to send in a complaint now. It may well be rejected so will have to go to the Ombudsman. At some point she will have to decide whether to carry on with this complaint or go bankrupt, but no need to make this decision now.
jimbob says
OK thanks for that. Was unsure if we could make a complaint after DRO revocation.
Just so i am clear. Insolvency Service say DRO will be revoked Feb 4th 2022 so technically still in it. Does that affect the timing of the unaffordability complaint being submitted.
Sara (Debt Camel) says
The reason most people should not make a complaint when they are in a DRO is that if they get a refund, the DRO will be revoked – not a problem in this case!
jimbob says
Thank you very much for the advice. Very clear about it now. Hope you have a great new year.
Ffion Evans says
Hi am going through a DRO 4 months now and I have applied for a advance payment of £800 to get a new washing machine do I still need to tell the DRO ?
Sara (Debt Camel) says
is this a budgeting advance or a budgeting loan, eg from Universal Credit?
(PS thats an expensive washing machine!)
Ffion Evans says
It was a budgeting advance. The washing machine i needed cost over £400 and the rest went on other things
Sara (Debt Camel) says
No you don’t have to tell the DRO about this.
Suz says
Hi My Dro began the start of October I’m a single mum on uc, but uc are ringing me weekly to get me back into employment, Iv been offered a job 16 hours a week, will this mess with my dro? The last thing I want is it being evoked. Thank you
Sara (Debt Camel) says
Have you looked at how your benefits would change if you took this job? It can be complicated, as you will have extra income but your UC will reduce and you may have extra costs eg travel to work, childcare. You may also find your council tac reduction drops, so there will be extra there.
A starting point would be for you to pretend you take this job and put the likely numbers into a benefit calculator eg https://benefits-calculator-2.turn2us.org.uk/.
Then you can talk to the advisor that set up your DRO about whether this job would affect your DRO.
A lot of single mums on 16 hourse low paid work are still eligible for a DRO.
Sam says
Hi I’ve recently started a DRO. it’s gone through the stage where I should hear back in 10 days if I get it or not. My question is I made the people aware that I will be getting made redundant which was 5 weeks into my breathing space and final draft of my paperwork had been sent etc. My redundancy date is mid April 22 and I will be getting 5 weeks pay worth of redundancy. Little over 2k but my car requires a fair bit of work dpf filter change £500+ thats without tyres that will need changing by then too I was going to look at using this to fix the car up and the job roles I’ve got interviews for if I get any of them I will require suits shirts ties shoes etc and was looking to use the redundancy payment to pay that lot otherwise I would not have the right clothing for the new job roll. Or my only other option would be to leave my current job don’t get the redundancy and sell my commute motorbike little over 1000 and get the job clothing and fix the car. ( the bike is down as an asset while the car is main mode of transport as otherwise i will not get to see my kids that i have with the ex). The car is a battered 10 reg but has 7 seats due to my 3 kids with an ex and new baby with current partner who I do not live with and I have a dog so the 7 seater is a must as I pick my kids up on weekends I have them and boot large enough to put bits in and the dog too.
Sara (Debt Camel) says
if your DRO application has been submitted you should know within a few days. What did your DRO adviser say about the redundancy options?
Sam says
Just they would make a note of it. I informed of the amount and the plan of action going fwd job wise as I would need to buy as stated clothing suit wise etc ( not something I’ve had to do in years and do not own any at all that would fit me now. As job role is within automotive industry in parts but dealing with public and their dress code is smart and the car also needs work ( I tried doing cheap fix by getting some spray but didn’t work so that was £20 a family member gifted me as a Xmas gift but nearly 5 weeks later the warning flagged up again. I mean if it goes through all OK would I be good to do the 2nd option ( that I really don’t want to do but will if I must to obtain the funds ).
Sara (Debt Camel) says
You need to go back to them and talk through you4 options as they know your current finances in detail.
Jade says
I have a query about the information showing on my credit file. I had a Dro March 2017 for 19k. I am now approaching 6 years and would like to get my credit looking good. The accounts included in my DRO are showing as open on there still. Is that correct or should they be showing as closed? Thanks
Sara (Debt Camel) says
This is wrong. See https://debtcamel.co.uk/repair-credit-record-dro/ which explains what should show and how to get creditors to correct it.
Beth says
Hello, my DRO. Started March 4th 2022.. I’ve just been offered a good paid job, and wondered the possibility of my DRO BEING REVOKED, Non the less I dont mind it being revoked so I can pay the debts, my question is, if it is revoked because I have enough money to pay the debts, is it still on my credit file for the 6 years, or does it get revoked and take off my credit file?
Hope that makes sense.
Sara (Debt Camel) says
I suggest you talk to the adviser that set up your DRO about whether it may be revoked. A well paid job is great, but you will probably lose benefits and expenses such as energy bills, petrol, council tax etc have all gone up.
If it is revoked, the adviser can help you look at your options to repay the debts.
It will remain on your credit record for the rest of the 6 years.
Joe says
Hi
I am 3 months into my DRO, it looks like I could be due to start over time in September for 3 months. It would mean I will earn slightly more, will this affect my DRO?
Sara (Debt Camel) says
Talk to your DRO adviser about this now – with everything going up in price, getting some more income may not leave you with that much extra spare money.
Dan says
Hi, I am in a DRO 1 month in. I have been amazingly left some money in a Will… totally unexpected. It’s a lot more then £2,000, but not enough to cover my debts. I am unsure of what to do.
Sara (Debt Camel) says
do you have any pressing needs – eg rent arrears?
do you mind saying how much you inherited?
and how large the debts in your DRO are? had a lot of these debts been defaulted before the DRO started?
when your debt adviser drew up an Income and expenditure for you, how large a disposable income did it show?
Mrs Sparks says
I have applied for a DRO which is going through its final stages. I have been off work for over a year and my company are looking at terminating my employment due to capability. Not sure when this will be. I understand I am entitled to notice pay. Do I have to let the insolvency service know about this?
Sara (Debt Camel) says
talk to your DRO adviser immediately about this. It may be a good idea to postpone the DRO application a bit.
Sweetpea says
If I have a DRO and receive pay in lieu of notice which is over £2000 but then purchase white goods which I need to replace eg. Washing machine, cooker etc which then takes me below the £2000 are the insolvency service likely to revoke my DRO?
Sara (Debt Camel) says
Pay in lieu can be treated as an Asset in a DRO – talk to your DRO adviser about this and what your options are. If your DRO is revoked, then you may simply be able to spend some of the money on essentials and then get another DRO.
ConfusedTiredDonkey says
Hi – i’m in my 9th month of a DRO with no income/benefits and my husband supporting me. I’ve recently got some short hours of work for the next 6 weeks only but now means i’m liable for a share of the household bills and doesn’t leave me over £75 free per month when I proportion our household income between our bills.
I’ve emailed the dro unit on the gov email address with my reference and the changes – should I follow up with a phone call? I’m concerned about being accused of not making enough effort to update on my change of circumstances and the DRO failing.
Sara (Debt Camel) says
I’m not sure which email you used. When your DRO started, you were sent a notice from the Official Receiver saying this. That will have had contact details for the OR. You should send your email to that address.
If you sent the email somewhere else, it may get forwarded, but to be safe i would resend it to the correct address.
I don’t see any need to follow up with a phone call – it doesn’t sound like you are earning anywhere near enough to exceed the £75 a month, and it is only for a short time. But if you are very worried, talk to the admiser who set up your DRO.
Ashleym says
Hi my dro started in march 22 i need some money for a car for work and school runs and i was wondering if im allowed to borrow from uc eg. A budgeting loan? I do not want to do anything to risk my dro but without a car i will not be able to carry on working? Many thanks.
Sara (Debt Camel) says
yes, you can take out a UC budgeting loan when you are in DRO.
Mark says
Hi Sara, my DRO was approved in May, with no money left at the end of the month. I just received £200 as compensation from a Financial Ombudsman case. Does this need to be reported to the OR?
Sara (Debt Camel) says
You should report all windfall receipts to the OR. not £50 your mum gives you for your birthday, but I would report this £200. But unless it means you have over £2000 in the assets, the OR is not going to care – see this as a formality so you keep inside the rules, not as something to worry about.
Deppi says
Hello, I received a lump sum of £300 and because of facing personal issues (escaping domestic abuse, ongoing harassment, being in interviews with police) I reported that to the OR 17 days later, instead of the 14 I read in many places. will that be an issue? For my DRO I have zero money left every month. I worry sick over that and cant believe it slipped my mind, while distracted with police support. Will that upset the OR?
Sara (Debt Camel) says
That sounds like an honest mistake. And unless that £300 means you now have over £2000 in the bank (!), the OR won’t mind at all.
Deppi says
Thank you for your prompt reply, Sara. Thank you for making this place available to us. Best wishes.
Jenny says
Hello
I looking at a DRO. I wondered if you know how they decide if you have more than 75 spare a month?
How much do they allow for shopping etc.
I know I struggle massively and can’t afford all of my debts but do they mean 75 a month spare including paying your debts or after they will be taken away?
And sorry last question. Do they go into your bank records of your spending etc.
Thanks so much.
Jenny
Sara (Debt Camel) says
Are you single? any children?
Antony says
Hi so I am 1 year into a six year DRO but your article says that it last for one year can you explain to me why mine is for six years please I’m a little concerned if I’m honest
Sara (Debt Camel) says
When did the DRO start? Can I check you aren’t making any payments?
Antony says
It started august last year and I am making monthly payments
Sara (Debt Camel) says
ah! This isn’t a DRO.
It is either a DMP or an IVA – they are very different. Which firm set this up for you?
how much are you paying a month and is this currently affordable for you? Will it be affordable when energy bills go up again in October?
Antony says
Yeah I was told it was going to be a dro and it was provided by quality insolvency services I am quite angry that they lied to me to be honest Iv been paying £77 pm but like a dro I have to go and ask permission to buy anything over £500 is that correct? Or is that another false thing that they have told me
Sara (Debt Camel) says
So you have been sold an IVA, or possibly missold it. Obviously they did a very poor job of explaining this to you :(
Can I ask how large the debts going into the IVA were?
Are you renting or buying?
Do you own a car, if so, how much is it worth?
Antony says
It’s around £12,000 I rent but am having to give up my house and am moving in with my in-laws as cost of living has become unaffordable for me 😞 first time in 12 years Iv had no choice but to give my home up. I own a car but it’s worth under £2000 I would have to predict
Sara (Debt Camel) says
could you afford the rent if you didn’t have to pay the IVA?
Antony says
It would probably make it easier to afford the rent but unfortunately if I don’t pay it I’ll have debt collectors ect coming after me so I have been backed into a corner unfortunately and I am tied into whatever the debt relief is I just wish they told me it wasn’t a dro as I would be debt free by now 😐
Sara (Debt Camel) says
No you aren’t backed into a corner – you can fail the IVA by stopping paying now and get an DRO which will clear all the debts with a single £90 payment. The DRO will then end in a year, during which time you pay nothing, and then your debts are wiped.
I am assuming you can get a DRO – this sounds very likely to me but you HAVE to check this. Phone National Debtline on 0808 808 4000 and say you are thinking of failing your IVA but you need to know first if you are eligible for a DRO.
Also you can talk to Quality Insolvency and say you cant pay because of rising bills (I am assuming that’s the problem?) and ask if you can have your IVA complated “on the basis of funds paid to date” as otherwise you will have to fail the IVA and get a DRO. See https://debtcamel.co.uk/help-ivas-cost-of-living/. If QI agree to this, it would mean you don’t need a DRO at all.
Laura says
Hello
I started a DRO in April 22 and have since had ongoing health issues. I’ve been offered a settlement at work to end my working contract, plus £8,000 settlement payment. I’m due to have an operation in October 22 which means I won’t be able to work before the operation, plus 6-8 weeks recovery time
This £8,000 settlement payment will just cover my outgoings for the next 5-6 months – until I’m able to get another job. Will this affect my DRO?
Sara (Debt Camel) says
It may well do – you need to talk to the debt adviser that set it up.
If your DRO fails, then one option is to get another one when the money in the bank has dropped to below 2k.