Debt Relief Orders (DROs) are 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 effectively cancelled and you are back owing your debts. But this doesn’t often happen – the OR has discretion about whether to revoke a DRO and in practice revocations are rare.
The DRO limits on assests and 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 money or your income increases this may take you over these limits. In these cases the Official Receiver will decide if your DRO should continue or if it will be revoked – that is the legal word for cancelling your DRO. The Insolvency Service says:
the decision to revoke following a change of circumstances is no longer being so strictly applied, with revocation now only occurring if the creditors could be expected to benefit if the DRO was revoked.
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. Don’t forget that you have to pay tax on the increase and any benefits such as Child Tax Credit or Housing Benefit may be reduced because 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 increase because a new baby has arrived, then your costs will also have gone up.
If your income hasn’t permanently changed, for example you did some overtime in December that isn’t usually available, 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 contact the DRO Unit, or what you should say, talk to the adviser that set up your DRO as soon as possible.
I have received some money
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 promptly, even if you think the money is going to be covered by one of the situations mentioned below. It’s important that you don’t spend the money because if the DRO is revoked, you may want to use some or all of the money to settle your debts.
Some special cases:
A lump sum from benefits back-dating
These may sound large but they are often not a problem because this treated as “income” over the period the back-dating relates to not “capital”. So the question is would you have exceeded the “spare income of £50” limit if you had been getting the correct amount of benefits all the time.
If the benefit is a claim for disability (PIP, DLA, AA) then an extra cost line for the disability would also be included in this re-calculation. So in 2018 the government is reviewing a lot of PIP awards – if you get a backdated sum for this, it shouldn’t make a difference to your DRO as any disability benefits you receive should be offset with an expenses line labelled “adult care costs” or something similar. the net effect on your “disposable income” is then zero.
A settlement for a Personal Injury
This may not matter. The 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.
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.
Inheriting money
This case is covered in more detail in a separate article: Inheriting money when in a DMP, DRO, IVA or bankruptcy.
The amount you receive is important
If the value of your windfall 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, the OR will look at the case taking into consideration the size of your debts, health, personal circumstances, age, etc. A decision will be made on an individual basis as to whether it would be appropriate to revoke or not. To construct a couple of cases (NB these are my examples not guidance from the OR), if you inherit £1,500, then the OR is more likely to revoke your DRO if you are aged 30, in work, with debts of £5,000 than if you are 70, living on a state pension with debts of £13,000.
For lump sums over £1,990, it is more likely that a DRO may be revoked, but the OR does have discretion so you should point out any factors you think should be taken into account.
How often do revocations happen?
In November 2018, the 250,000 DRO was set up. At that date there had been 2013/14 there were 2,437 revocations, so about 1% of all DROs.
This includes all the cases where a DRO was revoked, for example those where 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 in practice tiny.
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.
This article I’ve been sent PPI and my DRO has been ended looks at the very rare situation where you get a cheque for PPI for an old complaint that had been rejected.
Implications if you are thinking about getting a DRO
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 be thinking of a DRO in the first place. Have a look at a token payment DMP instead.
If you think you may get a lump sum in the next twelve months – perhaps you are trying to reclaim PPI, get payday loan refunds , you have a court case underway where you may get a financial settlement, or you have asked for some benefits to be backdated – then it would probably 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!
But in all other cases, I wouldn’t let worries about whether your income might increase 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
PPI – can I reclaim after a DRO?
Can I leave a debt out of a DRO?
Emily says
Hi,
I was approved for a DRO a couple of weeks ago, and had an updated tax credit letter for 16/17. There is a potential payment or £870 on there, but I won’t know if the payment will be made until I renew my tax credits. If I was paid out this £870 in a lump sum, would it affect my DRO?
Thanks
Emily
Sara (Debt Camel) says
An £870 lump sum is less than £1,000 so your DRO wouldn’t be affected. But you still need to inform the DRO Unit about it as soon as you get it.
Lisa says
Hi
I had a DRO confirmed on 7th March. However I have recently received a discretionary housing payment paid to my landlord. The payment was for a housing benefit shortfall from 6 April to 31 March 2017. The payment went straight to my landlord which put me in credit with my rent account as the debt was wiped out due to the DRO.
However my landlord has refused to give me the credit as the payment was for for the period before my DRO.
Can they do this?
Thanks
Sara (Debt Camel) says
Yes I think they can. Even though the rent arrears were included in your DRO your landlord could still evict because of the rent arrears, so it is good that they have been reduced.
Laura says
Hello,
My debt relief order was granted on this month and I’m currently unemployed, however I’ve discovered that I am eligible for the ‘new style jsa’. It would be £73 per week but this is only capped for 6 months and then the payments stop. Would my debt relief order be revoked based on this?
Thank you
Sara (Debt Camel) says
If your only income is benefits – whatever type – your DRO will not be revoked because of this. After the ‘new style jsa’ ends, you may be able to get Universal Credit.
Laura says
That’s brilliant, thank you for your very quick response!
James says
I wonder if you can help.
I have just been granted my DRO with debts of £17k. I am on benefits and have literally £0 disposable income.
I have an opportunity to have a full time job earning £1600 p/m after tax. Once all my bills are covered I’d have between £400 & £600 disposable income per month.
My questions are.. would this affect my DRO and when going from being on benefits to full time work, does the £50 disposable income still stand?
Regards
James
Sara (Debt Camel) says
It is very possible that taking this job may mean your DRO is cancelled – the term for this is “revoked”.
BUT Have you taken into account how much your benefits will drop if you take this job? You can use this calculator to work it out https://benefits-calculator.turn2us.org.uk/AboutYou And is your guess at 400-600 “disposable income”. a month taking into account normal levels of expenditure on food, clothes, transport to work etc? If you aren’t sure, or it seems a bit close to the £50 limit, talk to the adviser that set up your DRO.
Andrew says
Hi, my wife is 8 months into her DRO and as she is no longer on maternity leave, he salary is a lot higher. Our childcare payments and tax credit cover the nursery fees as it’s based on last years income which was low. My concern is now that our income is ok for the moment but next year we will be back in the same situation, as the increase in salary will lower the childcare payments. Can you advise please? Do I need to report this to the OR or will they have this info through their checks etc? Many thanks
Sara (Debt Camel) says
You definitely need to inform the DRU Unit. Also talk. To the adviser who set up your DRO as this was predictable so the advisaor was presumably happy this would be OK. But if there is any chance of your wife reducing her hours for the rest of the year that might be good…
Sarah McCarthy says
My husband is thinking of doing a DRO he is on esa and pip but has looked into his pension and may get a lump sum of around 6,000 would this lump sum be taken as income ?
Sara (Debt Camel) says
It would be treated as a windfall and it is almost certain his DRO would be cancelled, as the article above explains.
Unless he can postpone taking his pension until after the DRO has ended, he should probably not start a DRO. How large are his debts?
Tracy Moore says
Hi, I have had a D.R.O for 9 months now.
My debts were 15,000 pounds with interest in the end as I was on ESA at the time and on JSA now. What my concerns are if should a job becomes available in the last 3 months of my DRO would it get stopped as a result of work . I’m a single parent although I would rather work part time the job centre are happy for full or part time .
Sara (Debt Camel) says
Well it depends how much you would be paid. Getting a job means your housing benefit and child tax credit may reduce. You may also have child care costs to pay and things like transport to work? So the net effect may not be huge. If you get a job offer, you can use the calculator here https://benefits-calculator.turn2us.org.uk/AboutYou to see how much your benefits may change. I suggest going back to the adviser who helped you set up the DRO if you are unsure.
It feels very sad to have to say this, but you could always try not to get a job offer for a while – you are so close to the end now!
Daniel tower says
I have a dro in place which ends February. I might be getting carers allowance as my wife could be getting PIP. If I do it will be back dated so could end up getting over 1000. Will this effect my dro? Can I ask for less or ask for it not to be backdated so I dont Lose my dro
Sara (Debt Camel) says
If your only income has been benefits throughout the DRO, getting this backdated benefit shouldn’t make a difference (though you should notify it to the DRO Unit). But if you have had other income as well, I suggest you talk to the debt adviser that set your DRO up.
You don’t have to apply for Carers Allowance – you may think it is just simpler to wait until your DRO has finished.
DMM says
Hi, I have been advised by step change that a DRO would be a good idea. I am a nurse therefore my basic income is £1100 pcm however there are times where I will work anti social hours and that will increase my take home however is never guaranteed. My current left over money is £30. I am also expecting a baby in the new year so my circumstances financially will change again.
I’m very nervous that I will get to the end of 12 months and look like my income in really erratic etc, I’m not sure whether to do it or not as I’m scared I will
come to the end and be rejected. Also, the money that I would be paying towards debts would obviously not be outgoing anymore so wouldn’t it look like I had all that money spare? I’m confused.
Sara (Debt Camel) says
When Stepchange have looked to see if you qualify for a DRO, they will have taken your erratic income into account. And will also have done the sums assuming you aren’t paying anything to your debts.
StepChange set up a LOT of DROs, I would be surprised if there is a problem if they think one is right for you. Why not talk to them about it? It’s a big decision and it’s easy for me to say it’s probably right, but what is important is that you feel comfortable with it. StepChange won’t mind you asking questions, they woant you to understand what you are doing.
If you are having a baby in the new year (congrats! and this is a good time to be tackling your debts!) then whilst you are on maternity leave your income will be static anyway. And lower than it is at the moment.
Annie says
Hi,
I work full time & I’ve been granted a DRO in September & my child is staying on in full time education, I have received a review letter for tax credits, my payments have gone up by £100pm. I believe my payments are wrong & I will end up with an overpayment. As from April 2018 my payments drop by £150pm & will be worse off than I am now & I’m worried that my DRO will be revoked as the tax office don’t work out your correct payments until the end off the financial year. What can I do about getting the correct payments now as I don’t want my DRO revoked.
Sara (Debt Camel) says
why do you think the increase is wrong, is there something specific you can point and say that doesn’t look right?
Annie says
Because my income has increase by £3500 for this financial year (april17/April 18) so realistically my tax credits should of gone down but they have increased?.
Annie says
I went through stepchange, I also notified Hmrc about my increase in income in April of this year & didn’t expect anything else to change hence why I applied for the DRO.
Sara (Debt Camel) says
ok, well I suggest you go to your local Citizens Advice and ask for their help with this. You should also tell the adviser at StepChange that your benefits have gone up but you thjink it is wrong so you are taking advice.
emma says
HI, I have been advised to set up DRO by stepchange as I have less than £50 surplus per month. My only worry is im not claiming benefits except for child benefit, even though I am eligible for other benefits. Would my not claiming them affect my application for a DRO?
Thanks
Sara (Debt Camel) says
No it shouldn’t but why aren’t you? If you are eligible for other benefits they could make a huge difference to your situation and you may not need a DRO.
Edward Korhonen says
I took out a DRO in June this year. I’m currently involved in a compensation claim against my former employer in relation to an accident and injury in work. They have offered to settle for £6000 but I’m concerned about whether accepting the offer will result in my DRO being cancelled :-\
Sara (Debt Camel) says
That depends on how much of the money (if any) is being treated as compensation for time off work and how much is compensation for pain and suffering. This gets complicated – you need to discuss your options with the adviser who set up the DRO.
Guy says
I was recently granted a DRO by the Insolvency Service. I have no income at present, am not eligible for any benefits and my partner has been paying all my bills. I am looking for employment as I should be paying half of all the household expenses and half of the cost of the old car which we have. I have calculated that my share of the household bills is around £250 per month. This does not include my share of the food and grocery shopping which would add another £250 to this, nor my share of the expense of running the car which is around £95 per month including petrol, tax, insurance and maintenance. If I start employment and earn enough after deductions to pay these bills – i.e. £595 per month – is the Insolvency Service likely to accept that my earnings should go on these expenses first, and only after that will any disposable income be considered as being relevant to whether or not the DRO should be revoked? I don’t want the DRO to be revoked and I don’t want my partner to keep supporting me but wish to start earning and pay my fair share.
Sara (Debt Camel) says
It is your income AFTER you have paid for essential bills and expenses that matters. But your fair share will depend on how much your partner earns – if they earn 4 times as much as you then they should be paying a lot more of the bills… This can get complicated, I suggest you talk to the debt adviser who set up your DRO.
Guy says
Thanks, Sara. I will do that.
Freda Jones says
Hello, great site, with some great advice! Hoping you can help me with something I can’t find out the answer to anywhere else:
I have a DRO for which the moratorium period has now completed. However, I have just found out that I have been on the wrong tax code at work during some of this period, and will be owed a tax rebate of around £700. If I claim that tax back, does it mean that my DRO can still be revoked, even though the moratorium period is now over? I would still have been on under £50 a month disposable income on average for the year…but if I claim back the money – which is desperately needed, with Christmas coming up especially – will I get into trouble for not having informed them of this extra income (even though I had no knowledge of it myself until a week ago, and didn’t have it to spend during the period in question)?
Hope my question makes sense and you can understand my situation from the way I’ve described it…feeling a bit confused by it all right now.
Sara (Debt Camel) says
It is possible but extremely rare – there were only 5 cases in 2015/6 – for a DRO to be revoked (legal jargon for cancelled) after it has ended.
But this isn’t going to happen in your case. You haven’t done anything blame-worthy. And the £700 rebate is at a level where it probably wouldn’t have been a problem even if your DRO was still running.
If you would like this confirmed, you could call the Insolvency Service Enquiry line – see https://debtcamel.co.uk/insolvency-service-enquiry-line/. Thay are actually helpful, unlike most government helplines!
Freda Jones says
Thank you, Sara – really appreciate the advice and reassurance, as it has been worrying me. I will go ahead and claim back the tax. :-)
Jodie says
Hi I’m awaiting a response for my DRO. I’m also awaiting a response from my part time job about coming back to work after 5 months on SSP. They are not responding quickly and suddenly making the other staff either resign or those who are still there are signing sick leave forms suddenly. I have no idea what their response would be but on the very small chance they offer me a redundancy pay out… would this impact my DRO? If they did (which I’m sure they won’t) the money would be used to pay off the debt I owe my mum as obviously I couldn’t include this in my DRO but she is working every hour under the sun to cover a loan she has in my name and I want to pay her back what is owed as soon as possible.
Sara (Debt Camel) says
It would depend how much redundancy money you get as it can lead to your DRO being ended. There are so many unknowns here it’s not really possible to say much that is helpful. If you are offered a redundancy payout, come back and say how much it is before you make a decision to accept it?
Your debt to your mum really should have been included in your DRO – the Insolvency Service is not going to think using a redundancy payout to give her some money is an Ok thing to do… but at the moment you don’t know if any money is going to be offered, let alone how much.
Jodie says
Thanks for your reply.
How is it possible to add a debt to my mum? The loan is still being paid out of her pocket.
Sara (Debt Camel) says
The debt was taken out by her in her name?
Jodie says
Yes, that’s why we didn’t include it
Sara (Debt Camel) says
Legally it is her debt, it can’t be included. Well, come back if you are offered a redundancy and we’ll look at the numbers?
James says
Good evening,
I have submitted an application for a debt relief order through stepchange. I am waiting to see whether the DRO will be accepted.
My question is this: For one of the debts that I listed on my DRO application I gave a figure owing that was £20 more than the actual debt. This was an accident, as I when I was listing the debt I inadvertently reversed two of the digits. Will this affect my application? I am rather worried.
Many thanks.
Sara (Debt Camel) says
I don’t think this will matter at all. They want “accurate” numbers to check your debt total isn’t over the £20,000 maximum. If you have said £20 too high, that doesn’t matter. If you are worried, email the debt adviser who set it up, they will confirm this.
James says
Thank you very much for your quick response, and for putting my mind at ease. It is much appreciated.
sandra roberts says
I have a current DRO and have just heard that an old ppi claim has been looked at again due to the plevin ruling so the commission paid out by myself is due a refund of £363 can i accept it or will my DRO be revoked i’m really worried
Sara (Debt Camel) says
An amount of less than £1000 will not be a problem for your DRO but you MUST tell the DRO Unit about it as soon as you get it.
sandra roberts says
Thank you one more question today I got a letter from the claim company I used telling me I should go to the ombudsman about another claim that wasn’t successful. I’m thinking it’s not worth it with the DRO also the claim company is one of the companies that is included on the DRO
Sara (Debt Camel) says
Oh I wouldn’t do this. A cheque arriving out of the blue is one thing, but if you are applying for refunds in your DRO year and the total amount goes over £1000 (and you have already used up 363 of that) your DRO could be in trouble.
In fact I suggest you reply to the Claims Company that you do NOT want to go to the Ombudsman and that you withdraw any authorisation you have given them to pursue any refunds against any firms because you are in a DRO and you do not want any risk at all that the DRO could be revoked. Add that if they make any claims on your behalf after this clear removal of your authorisation you will sue them if your DRO is revoked for the total amount of the debts in your DRO.
Keep the email you send, or if its a letter, keep a copy, send it recorded delivery and keep the proof of postage.
Benita says
Hi ive been accepted for a DRO in november then was made redundant from my job in December with one weeks notice im due to around £1400 redundancy and 10 weeks notice which is £1300 will the OR take this as im going to have to live on this untill i find a job .
Also will this affect the DRO
Sara (Debt Camel) says
Sorry to hear this, and at such a bad time of the year too :(
The OR won’t take this money – that can never ever happen in a DRO.
BUT it is possible that your DRO may be revoked – that is the legal term for being cancelled. I suggest you get in touch with the debt adviser who set up your DRO urgently and ask for their help. You are going to need to talk to the DRO Unit about these payments and I think you need advice on your specific situation first.
The “worst case” if the DRO Unit says your SRO will be revoked is that you live on the money you have until it gets down to about £800 then you go bankrupt – the fees for this are £680 so you want to have enough money left to pay the fees. Actually bankruptcy will be about the same as a DRO for you so this isn’t such a bad option.
But the DRO Unit may decide not to cancel your DRO. And if you have any debts such as rent arrears you could argue these need to be paid and your DRO should carry on. So do get some advice from the adviser who helped you before, they know the details of your situation.
Emma says
Hi I am in the process of a dro. I am slightly confused on the wage increase part. Within my job I sometimes have to cover shifts at last minute due to being on call. I then record these on my timesheet as overtime and get paid. Will this affect my dro?
Sara (Debt Camel) says
You need to talk to the person setting up your DRO about this. If you know how much overtime you got in the last year, they will be able to say whether this would be a problem if you get around the same amount in the next year. If you have only just started getting this overtime, it might be better to wait a couple of months and see how much you actually get?
dannielle says
Hi, I am just about to pay the £90 fee on my DRO then it to be put forward so hopefully by the end of January.. I am now 6 months pregnant and hopefully will be receiving maternity off the government at £140 a week which is like £70 more aweek but will have higher out goings I will receive this only few weeks in to my DRO will this cancel my order.
thank you in advance
Sara (Debt Camel) says
If your only income is benefits, you will not have your DRO cancelled but you should still notify the DRO Unit of your additional income. You can check this with the advisor who is setting up your DRO if you want to be sure.
Good luck for the DRO & the new baby!
Kieron says
I’m currently under a DRO and have under 5 months remaining on it. I recently moved into a new home (rented) and been given a job. I don’t own anything in the home I have literally been leant a tv and a bed and the main essentials like cooker, fridge are part of the property so nothing in the property is owned by myself apart from clothes, food etc.
I earn £312 per week every week without fail. After paying rent, council tax, water, tv licence, sky, phone bill, food and all outgoings I have £15 disposable income. I got my job first and my house secondly, I feel for the first time like I can live and lead a normal life without the stress and worry of debts hanging over my head and for this reason I have not yet informed the insolvency agency with regards to all this new information, of course I fully intend on doing so in the next few days but my question is.. Will this affect my DRO?
Many Thanks
Kieron
Sara (Debt Camel) says
I think you should talk to the debt adviser that set up your DRO before you contact the Insolvency Service. You say you have 315 a week disposable income – the debt adviser will go through the required calculation details and check, as this could well still be below the £50 limit for a DRO. Even if it is just over, you will probably still be fine!
cindy says
Hi I have just taken out a D.R.O my job im in sometimes requires me to work overtime . is there a limit on how much throughout the year I would be allowed to work this as im scared this will affect my d.r.o if I worked this O/T. I may have to explain not being able to do any O/T at all to my manager and the reason why . thanks
Sara (Debt Camel) says
Hi Cindy,
I suggest you talk to the debt adviser setting up your DRO about this. If you are getting any benefits, they may be reduced by your overtime, so you don’t get as much extra as it sounds like. Also if you have been doing this overtime for the last 6 months, the adviser will be able to say if that sort of level of overtime will be a problem in your DRO year. I’m not says no it will be a problem, but it’s good for your peace of mind to have talked this through beforehand.
Janet Milliken says
Hi I’m paying £267 into a DMP but I’m struggling with the payment as I’m disabled and due to worsening mobility need to get taxis everywhere (including work). I also have mental health problems. I can claim a lot of the taxis fares back through ATW but tend not to as I can’t face the extensive form filling. My question is if I apply for a DRO (I’m eligible if the taxi fares are part of my expenditure ) will they expect me to claim them back & therefore deem me ineligible?
Sara (Debt Camel) says
Sorry, quite a few questions.
Are you getting PIP? What rate?
Have you asked if ATW will pay for some help for you to complete the taxi reclaim forms because of your mental health issues?
Who is your DMP with?
How large are the debts in the DMP?
Janet Milliken says
Hi Sara
I don’t get PIP (turned down)
I could get help with forms but the main problem is having to pay up front for taxis and then claim back at end of month
My DMP is with Payplan
The debt total is £10000
Sara (Debt Camel) says
OK, I think you should discuss this with Payplan as you haven’t been able to claim all your taxis back and you are in hardship because you have to pay the taxis first then don’t get refunded until the next month. Ask if you can not make this months DMP payments as a result.
I think you do need to ask for help with the forms. Once you are asking for a refund for every taxi, after a couple of months it will all be OK as every month you will get a full refund of the previous month which will let you pay that months taxis.
If you think your mobility problems have got worse, I suggest reapplying for PIP.
cindy says
Hi iv just been told I may be getting some back pay from work because of the shift allowance NOT BEING PAID CORRECTLY on overtime I had done the last 6 months before my DrO WAS ACTIVE I don’t know how much it will be yet . or even if I will get it . will this affect my DRO ?
Sara (Debt Camel) says
it’s hard to say anything until you have some idea of how much money could be involved. As soon as you do, talk to the person that set up your DRO.
Isin says
Hi I 2 years age applied for a dro .. near the end it came apprent that I owed over the 15k and was revoked.. I then went in to clear all my debts
I am have applied for a mortgage and in the first application was declined due to having a dro .
But as I paid all my debts and the dro was revoked I contacted Experian and Equifax and with proof of the letter confirming the revolke the both removed them from my file …so I have gone back to the mortgage company and they then approved my application in principle and invited me to make a full application of with I have and paid the relivent fees they have again declined it over the dro … i have argued this and it is under review but where do I stand please ?
Sara (Debt Camel) says
If it is rejected, I think yiu have a god case to ask for a return of your fees as the lender was well aware of your circumstances.
Isin says
As it was revoked can I plead that it had no effect as I paid my debts so not actually having the dro?
Sara (Debt Camel) says
Unfortunately, that is not the view that many mortgage lenders will take. All you can do at the moment is cross your fingers and hope this goes through.
Steve says
Hi. I had my DRO confirmed in June ’17. I contacted my old employer about returning to work, as we are behind with rent. I did not leave on good terms, so rightly he is quite reticent about re-employing me. If he does, he will want to keep me on a ‘trial’ of 1-3 months, to make sure that we can still work together. There would only be him and myself at work, so getting along together is of paramount importance. On my trial period I would be working 25-35 a week on minimum wage. My major concern is that if I tell the OR about my starting work and it doesn’t work out, I’ll be left with no job AND no DRO, and I wouldn’t be able to apply for another. I need to start contributing to the household bills, as things are getting a bit too much for us at the moment. I had mental health problems after leaving work and getting behind with my debts, and have been so much better since the DRO, and although I need to work to help my wife cope with the cost of living, I am pretty scared of jeopardising my DRO and being left worse off than before if I start work and it doesn’t go well. Should I not bother going back to work at all until after the moratorium period, or should I take the chance, presuming I am offered my old job back? Thank you for any advice.
Sara (Debt Camel) says
I think you should talk to the debt adviser who set up your DRO to see if getting your old job back would jeopardise your DRO. You would get more money but equally may get lower benefits? the debt adviser can help you work through this. Have you thought whether there are any options for part time work for a few months – that could be better for your mental health to get gradually back into things?
Claire says
Hi; I contacted stepchange in November 2017 and a DRO was decided to be my best option in dealing with my debts. I opened up new basic accounts as advised, however I was also advised to wait because I was waiting for a car insurance payout from an accident that happened in October 2016 (this is personal injury and out of pocket expenses) and I also had just started a claim for PPI.
I am STILL waiting for both of these. I have no idea of the figures for either. My solicitor is constantly badgering the 3rd party insurers in Spain to settle. (ongoing for over 14 months now. I had a reduction in hours at work last year partly due to business requirements and partly due to doctors advise as my blood pressure is through the roof.) So since November 2017 I’ve been hanging on and hanging on, I’ve been on a 3 month token £1.00 payment to my creditors that has now ended. I have until 7th of March to do something! every week my account goes overdrawn as I only work employed 20 – 24 hours a week. I am starting to get hit with bank charges on my new accounts.
I feel completely and utterly stuck and don’t think I can hang on any longer – It’s like I can’t get my DRO because of these potential payouts and if I do it’s at risk of an immediate revoke. I’ve tried to get advice from Stepchange, but they seem as confused as I am. I don’t have savings, and I drive my son’s car while he’s at uni so I don’t own a car of my own. Please, what would you advise my next step to be?
Sara (Debt Camel) says
From what you have said (and obviously StepChange know more about your complete situation) you have two choices:
1) tell your creditors you want to continue with token £1 a month payments for another three months
or
2) go for your DRO now. If the payout comes in the next 12 months (it may not, who knows?) AND if your DRO is revoked (it may not be, depends on the amounts) then you just use some of your money to go bankrupt instead. A bit like this situation: https://debtcamel.co.uk/ppi-refund-dro-revoked/
BUT I am concerned that you are getting bank charges. Did you open a Basic Bank Account? Because you shouldn’t ever get any charges on these accounts.
Claire says
Many thanks Sara, it’s a difficult one to decide. Re the bank charges these are coming from a standard account with an overdraft that was set up a couple of months ago following assurance that the insurance payout was imminent. I do have a basic account with the same bank so I could switch the direct debits over to that to stop the charges? Thank you for the link also, you’ve been very helpful!
Sara (Debt Camel) says
Not an easy decision, I agree.
Yes, move everything over to the basic bank account – the overdraft then becomes another debt in your DRO.
Claire says
Ok, I’ll do that asap. If I go for the dro now and payouts come in, will I still be allowed to buy myself a car? Under the allowed cost and keep some back as savings? I would really like to try self employment again alongside my job but to do this I need to purchase equipment, is this allowed during a dro? I’m starting to think a 3 month extention may be the best first option, see if these payouts arrive, bring the levels down if needed then go for dro? Thanks again
Sara (Debt Camel) says
I think its best to wait to see what you get, then discuss your options with StepChange.
Claire says
I’ll do that and push for a 3 month extention… Thanks so much for your time, writing everything down and your responses has helped to clear the muddled fog quite a bit. Fingers crossed something happens soon!
Natasha says
I’m applying for a dro done my budget form said I’m eligible if I’m self-employed and do my tax returns in April so the dro would start before or after I claim what would happen? Also my wages will be going up due to new job most likely 200 week need some advice
Sara (Debt Camel) says
I think you need to discuss this with the adviser that sent you the budget form.
Natasha says
What would happen with tax return ?
Sara (Debt Camel) says
Sorry, your adviser should be able to help.
Jodie says
I’m not sure if I’m posting this in the right place… sorry if not.
I had my DRO accepted in December.
I’ve now been awarded PIP which panicked me but luckily they don’t include it as income. However… Working tax credits now want to give me the disability part of tax credits and housing benefit have given me the highest level of housing benefit… all because I’m getting PIP. My advisor is looking into it and getting back to me but does anyone know if the extra tax credits and housing benefit could stop my DRO?
The PIP was a very much needed life line for myself and my daughter and I don’t understand why, because I’m getting more money, other people want to give me more money. I don’t mean to sound ungrateful but I find it all a little crazy.
Sara (Debt Camel) says
I hope you won’t have a problem. I would expect all the extra income to be offset by additional “adult care costs”.
Jodie says
I hope so, otherwise it will all be going on paying off my debts rather than the help I need for my health.
Has anyone else experienced This?
Jody says
Hey I just came across this site and found your question. I have had a similar problem I got a PIP re-assemssment which they gave me higher amounts for. Because of this my esa went up because I’m entitled to the severe disability component. Same sort of situation to you but just with esa instead. I’m freaking out. My DRO would be up in September and I wasn’t meant to get re-assessed for pips until November this year. But they decided to bring it forward. So now I have a Extra money coming in definitely over the £50 disposable which I can now to put towards heath costs but I’m worried the DRO won’t see it that way and will revoke it. I’m disabled and in severe need of this extra income so it is a blessing but I’m so scared I will now have to put most of the money to all my debts. Have you heard anymore about your situation?
Sara (Debt Camel) says
I don’t think you are going to have a problem but you do need to tell the DRO Unit about your benefits change. You may feel more comfortable doing this if you talk to the adviser/ charity that set your DRO up first.
Jodie says
The PIP doesn’t impact your DRO at all but you do need to tell them. The only problem I’m currently having is that as a result of my PIP my tax credits and housing benefit have gone up. They don’t include the Tax credits as it’s a disabled element but they will include my extra housing and my extra wages as I was off sick and on sick pay when I applied. I’m still waiting to sort it out and see what happens.
Lorna says
I want to set up my DRO and currently live alone with my 2 children, I may in the next few months be moving in with my partner who earns decent money, will this affect my application? My circumstances will differ when I move in as I wont receive any benefits anymore but will still have my part time wages.
Sara (Debt Camel) says
I think you should discuss this with your DRO adviser. It may not make a difference, as you will presumably have to contribute to household bills from your part-time income?
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.
Helen says
Hi Sara,
I am just wondering what access the IS/OR needs or has to my bank?
Wanting to change bank accounts (as having awful trouble with current bank) but I didn’t know if I had to remain with the same main account I had when I submitted the DRO in order for the OR to access my finances and see how things are going? How do they know I’m in the same position at the end of the 12 month period as I was when I applied for the DRO if I don’t have the same bank?
Many thanks!
Sara (Debt Camel) says
They don’t need any access at all and there are no checks at the end of the DRO. In the very unlikely event of the OR asking any questions (perhaps someone had reported you saying you had received a windfall) you could get your bank statements from your previous bank if that was necessary. So go ahead and change banks!
Helen says
Thank you!
Didn’t want to upset the IS/OR or risk anything!
Your advice is as invaluable as ever!
Kate smith says
Currently have a dro , and my son is being assessed for autism,global development delay been told to put a claim in for him for dla to help with his needs and sensory items etc if my son was awarded would this affect my dro thank you
Sara (Debt Camel) says
You should inform the DRO unit because this is extra income but it won’t be a problem as they will allow the same amount in extra expenses. good luck with the DLA claim, this could be a great help for you.
Sarah Cowle says
Hi, I was hoping someone could help me. My husband and I are on the verge of going through a DRO, we have completed our budget. But my husband is due to start a new job at the end of June, we don’t know what his monthly pay or hours will be and there for can’t budget based on what his new wage will be, and reading this has made me nervous that it may take us over the limit but I’m not sure.
What am I best doing?
Kind regards
Sarah
Sara (Debt Camel) says
You should talk to the adviser setting up your DROs about this. It may be better to wait a while until his pay is known – that may also affect any benefits you get? But your adviser may be happy for your DRO to go in now?
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?
Georgiana says
Hi,
I have my appointment to sign my DRO on 20th July.
I have been for the past 13 months on an IVA agreement, which I used to pay £100p/m. I have asked further support from a local charity, had few meetings with them and evidence was collected reaching the outcome that I am currently entitled to apply for a DRO.The overall expenditure was exceeding the Income by £150
I have sent emails of request of Termination of Contract to the IVA company, called them and still no answer back from them.( will chase them up again tomorrow, as I have been requested to have the certificate on the meeting agreed on the 20th of July.
A new job was advertised at my work place which comes with a salary increase of £4000. The likelihood of getting this job is high however, it will be conditional with additional travel expense, further private tuition which I will need to pay for.
A bit confused on best course of action and I feel reluctant to contact the charity as the person that deals with my case is on her Annual Leave and to be honest, embarrassed of keep asking questions.
Can I kindly ask for your advise further.
Many thanks,
Georgiana
Sara (Debt Camel) says
I’m sorry but you do need to talk to the person setting up your DRO about whether you should apply for this job.
kat says
Hi Sara,
“””A lump sum from benefits back-dating
These may sound large but they are often not a problem because this treated as “income” over the period the back-dating relates to not “capital”. So the question is would you have exceeded the “spare income of £50” limit if you had been getting the correct amount of benefits all the time.
If the benefit is a claim for disability (PIP, DLA, AA) then an extra cost line for the disability would also be included in this re-calculation. So in 2018 the government is reviewing a lot of PIP awards – if you get a backdated sum for this, it shouldn’t make a difference to your DRO as any disability benefits you receive should be offset with an expenses line labelled “adult care costs” or something similar. the net effect on your “disposable income” is then zero.”””
I am in this this situation and worried that in the summer my DRO will be revoked – Is this infomation the same for everyone?
Does it make a difference how much the backdated amount will be?
Will the extra income per month be treated as “care cost” or will they see this extra income as over the £50 mark and revoke it or will they recalculate with me?
Thanks in advance
Sara (Debt Camel) says
I don’t have any reason to change what I wrote, but I suggest you talk to the adviser who set up your DRO as they will know all the details of your case.
kat says
Thank you Sara,
I have issues with mental health and worried incase i dont explain correctly, will call and try my best.
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
If your only income is from benefits, I think you will probably be fine. When does your DRO end?
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, even though I am not expecting it to happen… 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
My DRO is due to end on the 16th of August 2018.
Sorry I should have mentioned that I have just over £12,000 of credit card debt. And yes my only income is from benefits as I am not able to work due to Crohn’s sciatica and depression. I was awarded my extra money without having to appeal as I had a lot of medical evidence. I have started to use some of the money to buy bedding and towels since it is over 10 years + since I bought the ones I have now and they are past their sell buy dates. Thanks for your quick reply.
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
It makes a lot of sense, talk to the adviser who set up your DRO and tell the Insolvency Service. (PS unlike you like working for free or the second job has huge potential for the future, why not give it up?)
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.
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.
Paula says
Hi
My dro is due to go through soon. My problem is my ex husband hasnt been paying maintenance for my children for the last 4 years but he has recently started working. He has said he is going to pay me each month through cms. Will this mean my dro will be revoked? I believe he will be paying around £230 a month.
Thank you
Sara (Debt Camel) says
You need to talk urgently to your debt adviser who is setting up the DRO about this extra income before your DRO is set up.
David says
If I spend £650 on a cooker can the official reciever take it off me and make me replace it with something cheaper?
My argumment would be that it is my money so if I want to buy an expensive cooker then I will, and that I had expected that my creditors would except my full and final offers, which I think they will given the alternative of me going bankrupt and they then .
getting next to nothing.
Sara (Debt Camel) says
A £650 cooker would fetch very little second hand, so that isn’t likely to happen!
The problem with spending “too much” is that there is the potential for the ombudsman to decide that you had spent recklessly and so you should get a Bankruptcy Restriction Order. If you spent the money on a holiday or gambled it away for example. I think it’s unlikely the OR would do this if you have just spent a bit much on an oven but it can’t be completely ruled out.
But you may decide you don’t care if you do get a BRO – you may think it would make little or no difference to your life. See https://www.gov.uk/government/publications/bankruptcy-restrictions-orders-and-undertakings/bankruptcy-restrictions-orders-and-undertakings
Ashleigh says
Hi I am looking into becoming a Foster carer this won’t take effect for at least 6 months, I am sending off for my Dro next week, does anyone know if it will be revoked? As the weekly allowance I will receiver from local council will pay for the child/ren I will Foster?
Sara (Debt Camel) says
I would hope this won’t be a problem! But you do need to talk to your debt adviser about it and the Insolvency Service will need to be told when you income changes (but not before).
I suggest waiting until the DRO has gone through rather than delaying it though. After all worst case is that if you are told the DRO would be revoked (which I don’t expect, but I always think it helps to consider the worst case) then you can just decide to postpone the fostering for 6 months until the DRO has ended?
Michelle says
Hi
I am currently on DMP and am considering a DRO as the DMP will last about 20 years currently. I have £7k debt. The thing is I do get a bonus each month and I never know how much this would be. Would the DRO take this into account? could they take my bonus off of me? I don’t know what is best to do. Even if I pay back whatever I get in bonus I am still looking to be paying this for approx. 10 years.
Any help is appreciated!
thanks
Sara (Debt Camel) says
Looking for another alternative to a DMP sounds sensible – 20 years is much more than 10 years too long!
How much has the bonus varied over the last year?
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.
Michelle says
Hi, I have been with a DM company since September as I became unexpectedly ill and have to leave my new job. I was in an iva when i was working. I deliberately failed (didnt pay) my iva as I had to claim benefits and vouldnt afford the payments. My new Debt Management people have suggested Bankruptcy, but my criteria fits a DRO, however, I had an Advance at the beginning if my benefits claim and they also overpaid me, so I owe the DWP now aswell! This has taken me just over £20,000, so my DM Company has said I am not eligible for a DRO. However, the DWP have wrote to me saying I am due a higher benefit and backpay, of which they will deduct the Advance and overpayment. I am considering holding off Bankruptcy and waiting to see if that backpay cancels out the money owed to them. Do you think this is the best approach? I have also been awarded PIP now. I have received backpay for tjat from Sep to end if November 2018. It was for £800. Do I need to let the Debt Management company know and should I deduct a month out of it as I dont receive my next PIP payment until end of December. I have car repairs to pay and its Christmas! Thank you.
Sara (Debt Camel) says
I think waiting until your benefits and back pay is sorted is a good idea if this willl only be a couple of months.
No you don’t need to tell the DMP company about the backpay. Car repairs may be urgent?
Michelle says
Thank you Sara.