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 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.
Contents
The DRO limits on assets and spare income
DROs have two important limits which matter if you get some more money:
- you cannot get a DRO if you have more than £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. There are two exceptions when you do NOT have to tell the DRO Unit:
- if your benefits go up in April because of an inflation rise.
- if you are getting any extra “cost of living” payments from April 2023.
It is unlikely that small increases in your income 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, council Tax Support 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 2023 inflation is high so a lot of other expenses, from food and petrol to mobile bills and energy costs may also have gone up.
A new Income and Expenditure assessment may be needed to show whether you are actually have more money left 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 2023 – 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 affordability 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 who 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 get 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!
About 1% of all DROs are revoked.
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 originally had debts that exceeded the total limit when the DRO was started.
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 £2800 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 to 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 think of a DRO.
- if 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.
- don’t start 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 from choosing a DRO.
As you can see from the statistics above, revocations are pretty rare!
Questions about DRO applications
9 tips to avoid having a prepayment meter
In a DRO what happens if I get a new partner
Lynda says
I have a dro in place since last feb 2015,for debts of £5000, however I recieved a lump sum of £8000 for a medical negligence claim that I did not expect to go through, that was in June, I only told the dro office in early january of this and have spent most of it, although I have told them before the year runs out will i be in trouble? I thought as long as I let them know before the year runs out it would be ok, I understand that it will be revoked.i have now been asked to send details of payment with bank statement showing the date and to sign a agreement for them to investigste my account and lifestyle, I am a 63 and on a state pension
Sara (Debt Camel) says
Oh dear, you really should have told the DRO unit immediately. Then if your DRO is revoked you could have used the money to clear your debts.
I think you you need to talk to the advisor who set up your DRO urgently. Medical negligence payouts can be complicated in insolvency and you need advice on this.
Suzie says
Hi I have a DRO that has just ended (the 12 month period that is). In June 2015 I had a serious back problem as was signed off sick. All I had to live on was 85.55 a week!! I live in rented accommodation and got myself into a further mess! As I had a small private pension and was 55 in March 2015, I drew down some of the money each month to live on (this equated to £800 a month – plus what I was getting for SSP). This was marginally less that I was earning – but after paying ‘bills’ etc still left me less than £50 a month. Should I have told the OR?? Will I be in trouble??
Plus, now that my DRO has ended, I would like to draw down some more money to help me (although am back working from January 8th). Any advice you can give would be much appreciated.
Sara (Debt Camel) says
Hi Suzie, technically you should have told the OR but if your new income (SSP + money you were taking out each month) was less than your previous income, I doubt whether you will be in any trouble. I suggest you contact the adviser who set up your DRO – you will be able to talk this through in detail with them and hopefully they can put your mind at rest.
Now your DRO has ended, you can do whatever you want with your pension. I always suggest that people get a free Pension Wise appointment to discuss their options: https://www.pensionwise.gov.uk/appointments. I think this could still help you even though you have set up the drawdown process – now you are back at work you need to know about the tax implications for a start.
I am not sure if you ever claimed Housing Benefit? This gives you help with your rent if you are on a low income. If you are back at work but still struggling financially, I think you should look into this. Try this benefits calculator https://benefits-calculator.turn2us.org.uk/AboutYou and see what it says.
Adam says
Hi, I done a DRO in June 2015. I was currently in a bad place and on ESA. ESA has ended now and I am feeling back to myself I was wondering would I be able to get a job or do I need to wait for the DRO 12 month period to end. I had to wipe off quite a big chunk of debt, therefore I wouldn’t want to think I would be looking for a job for them to tell me I need ro pay it all back. I have a family and a house and bills etc. Any help would be greatly appreciated.
Sara (Debt Camel) says
Hi Adam,
it will depend how much you earn if you get a job. If it is a lot, then your DRO might be in trouble. If it isn’t a lot, then with a family you could well end up with less than the DRO spare income limit so there wouldn’t be a problem.
You may be getting things like Housing benefit and child tax credit now that would reduce if you got a job and that would be taken into account.
I suggest the best thing for you to do would be to go back to the adviser that set up your DRO and ask what would happen if you got a job earning £x per month.
megan says
Hello, I’ve recently been approved for a dro, we are a low income family, and our tax credits are due to increase in April by £20 a week, I’m so so worried they’ll revoke my dro, is it likely?
I’ve not slept for weeks for worrying about it, any advice?
Sara (Debt Camel) says
Hi megan, if all your income is from benefits, then this won’t matter at all as you will automatically be under the DRO limits. If you have some other income, then this is extra income but you may well have got some extra expenses too? I would be surprised if you have a problem with this, but the best thing is to talk to the adviser that set up your DRO – they should be able to put your mind at rest.
Jean says
Hi,
I have recently paid the fees for a DRO but have not yet made it active.
I’m a single parent receiving income support with debts of 17000.
I’ve just been offered compensation (as a ‘goodwill gesture’) from a previous employer of £2000. Can I take this and wait until it’s gone before making my DRO active, or realistically do I have to turn it down?
Sara (Debt Camel) says
Hi Jean, Do you actually have any savings at the moment? Most people applying for a DRO don’t… But you are allowed £1000 in savings which could make a big difference to you going forwards.
So my suggestion is that you talk to the debt adviser who is setting up your DRO and say you want to accept this £2000, distribute £1000 of this pro rata between your creditors, leaving you with £1000 in savings and make your DRO application at that point. The adviser will be able to say how much you should send to each creditor.
Jean says
Hi Debt Camel,
My former employer has revised their offer to £8,000!
I still haven’t made my DRO active, and don’t know what to do! It certainly wouldn’t clear my debts and I’m worried that accepting it would make me worse off down the line.
Can I gift it to my Son? Spend it? Or distribute it between my credit cards, and still have 10k of debt I can’t afford. I never thought I’d lose so much sleep about being offered money. Thank you so much for your help this far..
Sara (Debt Camel) says
No you can’t gift it to your son.
My previous suggestion still applies, you just have more money to distribute. Talk to the advisor arranging your DRO about this.
(Of course if your ex employer offers you more you may be into the area where you could make full and final offers on the debts – but 8k wouldn’t be enough unless you have been making token payments to the debts for quite a while.)
Alex says
I am on debt relief order and i get minimum wages currently but will be increased 1 month later that will increase my montly payment about £80.do you think so official receiver can cancel my dro.thank you very much.
Sara (Debt Camel) says
Hi Alex, if you are getting any form of benefits (Housing Benefit? Working Tax Credit?) then these may well be reduced when you get your pay rise so you won’t be £80 a month better off. I suggest you should talk to the debt advisor who helped set up your DRO as they will have all your details.
Daniel says
I will have my dro order in April
I am currently unemployed
Will my dro be cancelled if in full time work
Sara (Debt Camel) says
Hi Daniel, you can still have a DRO if you are working, but it will depend how much money you will have left after paying your bills, and expenses. Obviously you will lose JSA when you are working, but you may also lose some housing benefit and other benefits as well. And of course you will have the costs of transport to work etc which you don’t have now. If you are offered a job, talk to the debt advisor who set up your DRO and they will be able to say if it is likely to affect your DRO. Even if they say it won’t, it’s still a good idea to inform the DRO Unit that you have started work.
Kate says
Hi
I had a DRO in January this year.i am a single parent not working.i am looking to go back into work.if I do will I have to start paying the loans off again? This would be part time work
Rdgards
Sara (Debt Camel) says
Going back to work will only be a problem if you will be ending up with more than £50 a month in spare income. But this will be after taking into account any new costs you have (child care? transport to work?) and any benefit reductions (child tax credits? housing benefit? council tax support?). You may well not have a problem.
If you aren’t certain about this, talk to the adviser who set up the DRO and they will probably be able to do a “what if” calculation for you so you can see what the net effect would be.
judi says
R u allowd to earn 50 a month then
Sara (Debt Camel) says
The “£50 a month” is the amount of “spare” money you are allowed after paying for your sentinel expenses. It can be quite hard to work out, which is why it’s best to talk to a debt adviser about the calculation in your case.
matt says
HI, I am looking into a DRO but starting uni in September, which means i will get around 9,000 as a student loan for the year. Will that income qualify me as having too much money. I don’t work an have no other income apart from a bursary from college at £80 per month, which will stop when i start uni.
Thanks,
Sara (Debt Camel) says
Hi Matt, it isn’t the amount of your income that matters, it’s how much “spare” income you have each month after paying your bills and expenses. For students the tuition fee loan doesn’t count because it’s used to pay your tuition fees, but maintenance loans are income. You need to discuss how your finances will shave in September with the advisor setting up your DRO – it may well not be a problem but you do need to check this before starting a DRO.
Jacqueline says
I have recently had my appeal for PIP granted at a tribunal, which has taken over a year and a half since first plucking up the courage to apply. I have been unwell with a long term health condition for over 4 years. At the tribunal it was recommended that I was backed dated 2.5 years payments. Which is good news as My family has been really financially struggling, but I am very concerned as I have recently (Jan 2016) been grated a DRO (Debt relief order) I am really worried that when I find out exactly what I will be pain and let the insolvency service know they will either take it away or give my debts back. But even with these extra PIP money, surely it is meant to help me with my health regardless of what’s backdated. I hope you can help. I had thought of going back to my local CAB but thought I’d try here first. Many Thanks.
Sara (Debt Camel) says
Hi Jaqueline, well done on the tribunal win! For your DRO, the backdated payments are treated as “income” spread out over the 2.5 years, not as a capital sum so this usually isn’t a problem. You will need to go back to CAB (assuming they they set up your DRO). This will need to be reported to the DRO unit, but the adviser will also supply a new Financial Statement looking at your recalculated income and the additional expenses you will be allowed because of your disability.
Jacqueline says
Yes the DRO was set up at my local CAB so I will make a appointment with them.
Thank you for you help, much appreciated!
Nicola says
Hi, I am under Dro. My job involves driving around and I claim mileage for this. Since taking out DRO MY BOSS HAS ASKED ME TO DRIVE FURTHER AFIELD, meaning my mileage will go up by about £250 Pm. Tho will fluctuate over the year but unlikely to go over £300 PM. This will take me about £220 over the ‘£50 limit. My debts we’re just shy of £15k. DRO only granted Feb 2016. In your experience do you think this level of extra expenses is likely to mean a revoke of DRO? My health condition means I am unlikely to be able to go back to ft employment. I’m terrified I’ll get a revocation and be left with a debt I can’t pay. Does anyone else on here have experienced they can share? Thanks.
Sara (Debt Camel) says
Hi Nicola, if you are driving a lot more, your car expenses are going to go up a lot, not just the obvious petrol, but replacing tyres, brake pads, higher service costs etc. I would have thought that the additional mileage you will get paid will be largely cancelled out by the extra costs – not every month but over time. I think you should talk to the adviser who has set up your DRO about this – it may well be that you don’t need to worry.
Lyndsey says
Hi i have a active dro which started in october 15 I was living with my partner until a few weeks ago so i am now claiming income support which increased my weekly in come by £45. When i applied for the dro my income was 1850 but has now dropped to 1710 but im no longer paying rent. In january i received a letter for benefit and housing benefit overpayment which i am currently paying back at 80 a week.. so the extra income im receiving im paying out when ive worked it out i have 42 pound a month.. will my dro be revoked and do i have to inform the insolvancy service.
Sara (Debt Camel) says
This is pretty complicated and there isn’t much point in me guessing. I suggest you go back to the adviser who set up your DRO and let them work out a new income & expenditure for you, then you can show that to the DRO Unit at the Insolvency Service.
Andrew says
Hi, Ice seen that if you are on benefits they you would automatically qualify. can you confirm if this is all benefits? Her maternity leave starts and she’ll be on a reduced salary for the 9 months.
Thanks
Sara (Debt Camel) says
Hi Andrew – I assume this is for your partner? She needs to discuss her situation with a debt adviser that sets up DROs as there are different types of maternity pay and different levels. Also there is the question of what is going to happen at the end of the 9 months, will she be returning to work? If yes, she will presumably have child care costs so she may still meet the DRO requirement, but this needs to be looked at in detail.
Louisa says
Hi I wanted to ask what would happen if I would receive a redundancy payment around £5000. My dro ends in November. Can I ask my employer to postpone payment? I’m terrified to go back to times when I had no money for food. I was on debts 6 years. I’m single parent and if I would loose my job the money wouldn’t last long. Please help
Sara (Debt Camel) says
This must be very stressful, losing your job is bad but the idea of getting your debts back makes it a lot worse.
You could ask your employer to not make you redundant until after November, but often this won’t be possible.
If you are made redundant before then it is likely your DRO will be cancelled (“revoked”).
But if it happens (and fingers crossed it won’t) then you will have options. You could offer your creditors a full and final settlement with the money. Or you could wait till you get a new job and see how much is left – if it’s not enough for F&Fs you can always go bankrupt. In your situation bankruptcy is no worse than a DRO, much the same but the fees are higher. Well you will have the fees…
DianaM says
Hello
My partner and I have recently talked to an advisor and we are applying for a DRO as this was proposed as the best solution. Except I’ve just been offered 5 weeks work before I have my second baby in July. It would be fixed term and only for those 5 weeks but we’d get a lump sum of about £650 at the end of it. Would this disqualify us from being eligible for a DRO?
Sara (Debt Camel) says
If this money will be before your DRO starts, you need to tell the advisor setting up your DROs about this, but unless you were close to the “£1000 asset” limit rule it is unlikely to be a problem, especially as I guess you may need to spend some of it immediately on things for the baby. If you are close then the advisor can talk though your options.
If the money will be after your DRO starts, tell your advisor now and also you will need to tell the OR as this article says, but it shouldn’t be a problem.
Becca inghan says
Hi it’s been 14 months since I was approved for a DRO. My rent has increased as we have moved to a bigger house so paying bedroom tax. My husband is on esa and pip and I am caring for him and our 2 kids so I’m not working and wasn’t when DRO was put in place. Anyway am I able to get a part time job earning more than £50 per week or does that limit apply for the full 6 years? I’m very confused :( thanks
Sara (Debt Camel) says
Your DRO should have ended after 12 months – this article https://debtcamel.co.uk/end-dro/ explains how to check that it has and it’s a good idea to print off this confirmation that it has ended, as it disappears after 3 months!
Once your DRO has ended, you can earn as much as you like. I hope your part time job goes well :)
Mrs Gee says
I applied for a PPI reclaim back in Nov ’12 and was awarded circa £750 from Lloyds. Fast forward to Jan ’16 and I get my DRO granted, owing 19k to 6 creditors. Today (June ’16), still in the moratorium period, I get a call from Lloyds who have ‘independently reviewed’ my previous PPI award and now find they owe me just over £2000. I called the Official Receiver’s office who couldn’t help as it was bang on 5 o’clock and their staff had gone home. I am absolutely worried sick that my DRO is going to be revoked. I have severe anxiety/depression related to my debt problems. I am feeling suicidal at the prospect of having to start all over again. I don’t want the money, I never asked for this review! Both StepChange and the OR office have told me that I cannot refuse the payment. What should I do?
Sara (Debt Camel) says
The DRO Unit will make a decision on whether to revoke your DRO. Normally for £2000 they would, but they can consider mitigating circumstances.
If the worst happens, well you now have 2k and therefore have the money for the bankruptcy fees. (You also have a bit more, so if you have any desperately urgent expenses to pay?) Going bankrupt is now a more simple process as you can do it online, no need to go to court. I’m sure you would rather your DRO just completed normally, but bankruptcy for you is likely to be a pretty painless alternative.
EDIT – see this article on this situation https://debtcamel.co.uk/ppi-refund-dro-revoked/
Mrs Gee says
Hi Sara, just thought I would update you on my situation. I received a phone call today from StepChange. Apparently they’d been contacted by the Insolvency Service to say that they were revoking my DRO in September. It seems that it is pretty black and white when it comes to windfalls in excess of £1000. If I’d have known this, I wouldn’t have put so much information together in the pack I sent out to the Insolvency Service.
Ultimately, StepChange have told me to now cash the cheque, and put aside the fees for going bankrupt. In the meantime, should any essential expenses crop up (broken washing machine, fridge etc.) then I could use that money to sort it as long as I keep receipts to show the OR when I go for bankruptcy. Unfortunately, things didn’t pan out how I wanted but now I just have to carry on facing my problems and start putting together my details for bankruptcy. Thanks for your advice Sara, it was very much appreciated.
Scott says
I have been under a DRO for 5 months. I have just received a lump-sum of £2000 for under payment of child tax credits. Do I need to contact the OR?
Sara (Debt Camel) says
Hi Scott, yes you do. You may want to talk to the debt adviser who set up your DRO first, but after that you do need to inform the OR.
Praveen says
Hi my DRO has just been granted. I do have a question however. I will be receiving Student Finance…all of which is going to be paid directly to my university from bank account. So I will receive 3 payment totaling 5,330£ from Student Finance. I will also be receiving 2 payments of 1,835£ from my parents which will go directly to my university to cover my tuition fees. I understand I should contact the DRO office as soon as I receive these payments. I can also provide them with proof that the money is being paid to my university so I do not have any left for my own expenditure. Does anyone know if my DRO will be revoked? Thanks!
Sara (Debt Camel) says
I hope you told the debt adviser setting up the DRO what your income is going to be. Students getting grants from Student Finance certainly can have a DRO, but it’s best to talk to your debt adviser about your own situation as they will know all the details.
It might be easier if your parents pay the uni directly, not via your bank account?
Praveen says
Hello and thanks for replying. I did not tell the debt adviser because I have only just decided to take the maintenance loan from Student Finance. I am going to call the Insolvency Service on Monday and update them. My parents insist on transferring the money to my bank account so I can pay my university in one lump sum (they don’t know about the DRO). I guess we’ll just see what the officer says on Monday. I am hoping when I tell them I can show them statements of me paying the money to my university that will be satisfactory. What are your thoughts?
Ian says
Hi my partner went into a DRO in May as she had debts of 8k and has less than £50 disposable income. She has been offered a part time job 16hours per week on minimum wage so will earn around £500 per month with travel/after school clubs to come out of this. Is she likely to have her DRO revoked or have to pay more money back please
Sara (Debt Camel) says
Hi Ian,
“pay more money back” isn’t an option – either her DRO will be revoked or it will continue.
I think she needs to work out how much extra income she will end up with after the additional expenses. She also needs to take changes in benefits into account – will she be able to get Working Tax Credit? do you currently get housing benefit or council tax Support which may be reduced? It’s probably best for her to go back and talk to the adviser who set the DRO as this is pretty complex.
Ian cross says
Sarah she gets no benefits at all. I think after transport costs and afterschool clubs taken off she would have about £300 a month left
Sara (Debt Camel) says
She still needs to talk to her debt adviser. If she had no income before and you were paying for everything, this may need to be revisited so she pays for a proportion of the household costs.
Ana says
Hi, my DRO has just been granted. I have received a tax refund cheque for £475 from HMRC for paying extra tax for last year. Do I have to inform the insolvency service and is £475 going to effect my recently granted DRO?
Sara (Debt Camel) says
Yes you should tell the Insolvency Service straight away, but as it is less than £700 it shouldn’t be a problem for your DRO.
You may need some of the money right away, but it would be great if you could put half into an emergency fund, perhaps with your local credi union? Then after your DRO has finished if you ever need to borrow, you can go to the CU for a reasonably priced loan. See https://debtcamel.co.uk/emergency-fund-first-aid-kit/
Emily says
Hi, my DRO was granted in October this year. Part of my DRO included Child tax credit over payment. Now tax credits have wiped the over payment they have put my money up weekly by £100.. I will defiantly ring the OR to inform them of this but I’m just worried it will be revoked. I recieve tax credits for four children & tax credits make the money up with a disability element title ment for my son.
Sara (Debt Camel) says
This sort of benefits change doesn’t usually make a difference, but definitelytell the OR. If you are worried, also talk to the adviser who set up your DRO.
Karley says
Hi,
My DRO was granted in August this year. At the time of my application I was in receipt of £70 per week working tax credits, which has recently dramatically dropped to £6 per week.. Am I able to make up this income loss with over time at work to top up my wages? – Do I need to inform the OR of this?
Many thanks
Karley
Sara (Debt Camel) says
Earning more may affect other benefits – I think you should discuss your situation both for the DRO and for benefits generally with the debt adviser that set your DRO up.
Paul says
Hi my partner has an active dro and I moved in to her property taking earnings to nearly 2500 a month she never declared this to the insolvency service will her dro be revoked
Sara (Debt Camel) says
Your earnings aren’t relevant to her DRO.
However, her own income and expenditure may have changed now that you are living with her. You will probably be paying some of the bills which will improve her situation. But she may find that her benefits have been reduced, possibly by a lot, which would make her individual income & expenditure position worse. I suggest she talks to the adviser who has set up her DRO who can look at the details for her.
Paul says
All her benefits went up as a result of me moving in as I was paying most of the household bills but we had after bills over 200 a week spare should she of contacted dro and told them so her outgoings should of been adjusted is this classed as fraud not notifying them
Sara (Debt Camel) says
It’s not possible for her benefits to have gone up because you moved in. Sorry but the calculations are really complicated – that’s why she needs to first speak to her debt adviser.
Mrs B says
I am 6 months into my DRO and at the moment work full time earning £1,100 a month. I may have chance of another job which is £1,250 a month, do I need to advise the DRO office? The job is a little further to travel to and if I’m offered the position I’m not sure now whether I’d accept if it meant by DRO was revoked, help!? I owed £18k so couldn’t afford to pay the debts even with this potential wage rise thank you in advance
Sara (Debt Camel) says
Hi Mrs B, I think you should talk to the adviser that set your DRO up. They know all your current situation and can help you make this decision.
Tracy says
Hello. Just wondering if while I am in the 12 month period of my DRO and my ex decided to start paying maintenance for my two children would I have to inform the OR?
It’s all a bit confusing!
Sara (Debt Camel) says
Child maintenence isn’t usually a problem for DRO as although it counts as “income” it also results in extra “expenditure” being recorded. I suggest you talk to the advisor who set up your DRO who will know the full details of your case.
Ste says
I’m 2 months off the end of my DRO, I had pay rise when the national minimum wage increased, and rang stepchange for there advice they made some alterations to my budget, but never mentioned I should contact the insolvency services directly, I’ve rang them today as I received a letter from my creditor and I thought I’d mention the fact that on two of the months I’ve managed to get some over time in and earned over my allowed amount they then said I should have rand the debt insolvency service when I had a pay rise and I now need to ring them, I’m worried that because my pay has gone up and on the odd month I’ve done some over time that this will affect my DRO and I’m thinking that maybe keeping quiet is now the best way forward, as the pay rise went up six months ago and I’ve had no letters of contact from the insolvent service. I’m just really worried about going back to being in debt, yeah I’ve had a pay rise and I’m about 70 pounds better off enough but I can’t go back to being in thousands of pounds worth of debt.
Sara (Debt Camel) says
I’m sorry but you do need to tell the DRO Unit about your pay increase. You can explain that you told StepChange months ago but they didn’t say you had to report it.
Also have a think and see if any of your costs (rent council tax, utilities, petrol, etc) have gone up, or if any of your benefits have gone down because of this payrise.
jennifer says
Hi, I’m on a debt relief order,my brother wants to put some money in my bank account,for me,my two daughters and sister, maybe £300 in total.will this affect dro.ive asked and they said it should be fine,but I’m worried, incase they revoke it anyway?
Sara (Debt Camel) says
This won’t be a problem. Tell the DRO Unit when you get the money, but they won’t revoke your DRO.
DAZ says
I have just had my DRO completed 8 Dec 2016 and have been awarded Pip standard rate. I was back paid 650 and I have been informed we will receive housing benefit double what receiving before and also may have tax credit rise for disability premium. I’m so worried this is now going to affect my DRO. I have added costs as need to buy wheelchair go to a gym for professional advice on fitness and taxi to attend my support group. Any advice please.
Sara (Debt Camel) says
I don’t expect this to cause a problem at all but you shoukd tell the DRO Unit about any money which you received before the end of your DRO. Money received after, even if it is backdated benefits, doesn’t matter.
Darren says
Firstly, what a fantastic website with so much useful information. Thank You.
I had a Debt Relief Order agreed in August 2016, and I included my ESA benefit. However, DWP have now stated that I am unable to work due to my severe anxiety / depression and put me in the Support Group, which increases my money by £60 a week (this includes an Enhanced Disability Premium). I am just so worried that my DRO will be revoked due to the extra income. What do I do? Do I submit a new income and expenditure sheet, or wait for them to ask?
I also received a back payment of £1400, but I have spoke to them about that and they don’t think this will be a major problem due to my debts exceeding £15,000.
Any help will be appreciated.
Daz
Sara (Debt Camel) says
Normally what happens with a benefit rise is that your expenses are increased in line with your additional income, so your income and expenditure is not showing a big surplus. Tell the DRO Unit what has happened – there shouldn’t be a problem.
Craig Jeremiah says
I am looking into applying for a DRO but i know that i will get a small pay rise soon. Is it best to wait until i have had the pay rise before making an application or would it be best to make the application and then inform the relevant people of my pay rise when it happens.
Sara (Debt Camel) says
I suggest starting off an application now but explaining about the pat rise to the debt adviser. They will be able to make an informed decision – it may not matter at all!
Ross McKay says
Hi I’m about to apply for a dro but also I work in construction and will be filling in my tax return soon and I’m expect to get at least £2000 will I have to state that I am receiving this money even though it’s through my business and not personal?
Sara (Debt Camel) says
Hi Ross,
I suggest you talk to Business Debtline about this https://www.businessdebtline.org/.
Jay says
Hiya
I am only 5 months into my DRO and have had a baby so now receive around £60 extra a week in child tax credits but obviously spend all of this on feeding/clothing/maintaining baby so it has not given me anymore incomings as my outgoings are now higher. Do I need to inform insolvency?
Sara (Debt Camel) says
Yes, but explain the circumstances. It isn’t going to prove a problem – the extra money is because you have extra costs.
david says
hello
My brother has a DRO thats been going a few months, he recently had a win and it went into his bank around £4000.00 he has spent it on a holiday. he wants to know if he will be found out when he travels abroad or by any other means.
Sara (Debt Camel) says
Your brother needs to report his win, whatever it was, to the DRO Unit. It is then highly likely that his DRO will be revoked. Not to tell the DRO Unit is a criminal offence.
Julie vallance says
Hello I,m a bit worried not long been in my dro and now I’ve had a little win the amount is £800 how will this affect me when I tell them .
Sara (Debt Camel) says
What sort of win was this? Gambling, PPI reclaim, a court case?
Julie vallance says
Lottery hot pick 3
Sara (Debt Camel) says
OK, well you need to report it to the SRO Unit asap. You will probably be OK< at this level the OR has discretion over what to do. But I suggest you don't make any more bets for tht rest of your DRO year!
Julie vallance says
Thank you will phone tomorrow thanks for your help
tom says
hi i took a dro out in decemeber as ive been off work for 7-8 months due to a problem with my knee, so only option was a dro as im not able to earn anythinbg to pay back my dept., (£14,000) im very unlikey to return to work for a long time yet as i may have to have a knee replacement.im only earning esa atm £74 a week, but apparently i may been made redundant and will recieve a payment off around £3000, how will this likly affect my dro? would i be better off just quiting my job now so i dont recive a pay out? dont know what to do? dont want to struggle again?
Sara (Debt Camel) says
Hi Tom,
As the payout would be over £1990, the DRO Unit is likely to be revoked BUT they do have discretion and will take into account the size if your debts (which are obviously a lot more than your possible payout), your health (unlikely to improve soon) etc. Also if you have any urgent need for some of the money – it can hard to manage on ESA so if you need a new washing machine or you have rent arrears say.
Revoking your DRO may sound like a disaster. But you would be able to use the redundancy money to cover your extra living costs for a while – if you need a knee replacement you may have a period where being able to pay for mini cabs easily would be really helpful say. Then you could go bankrupt as you would have the money for the bankruptcy fees.
If you are renting and living on benefits, there is very little difference between a DRO and bankruptcy.
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 DRO Unit. Also talk to the adviser who set up your DRO as this was predictable so the advisor 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
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. 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, talk to the debt adviser who set up your DRO.
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?
if so, it’s legally her debt and can’t be included
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 DRO 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.
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 £15 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.
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.
kate says
Hi Sara,
thanks for your help with my questions so far – my debt releif order was approved (yay) my new questions/ concerns is:
i currently getting PIP £310 per month my spends is board payments of £250 and £30 for my mobile phone(from the low payments i have not put things down like clothing prescriptions food gas electric) Stepchange put in the rest of the money as care costs from my PIP. As you have probably seen in the news PIP is getting reviewed and i beleive this is going to affect me meaning my payments will go up and potentally backdated – I do know I have to let the IS know about these changes but will this revoke my DRO?
also, i have been told about another benefit i could apply for ESA (contribution-based) should i apply for this? i dont know what the IS or stepchange would see as care cost but before i was unwell i was paying £400 board i was buying food paying gas and electric but now i dont have enough but this is now causing issues with my partners income and outgoings. I hope I have explained this ok, Thank you
i will also post this on MSE forum
Sara (Debt Camel) says
Hi Kate – good that your DRO is underway. Yes you will have to let the IS know about any backdating of PIP but this should not affect your DRO. Disability benefits backdating is treated as though it should have been “income” over the period the backdating is for. And although this means your income will be higher, you will also be able to claim higher expenses for this period so it will be cancelled out.
The ESA you need to talk to StepChange about – I think it will be OK because effectively your expenses are too low at the moment, but best check and get this one right. NB this is only a potential problem because it is “contributions based” ESA – there would be no problem with income based ESA.
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!