Choosing between a Debt Relief Order (DRO) and other debt solutions is often a pretty easy choice! Let’s look at when a DRO is a good option for you and what the alternatives might be.
Debt Relief Orders
DROs are a form of insolvency in England, Wales and Northern Ireland. For an overview of DROs, read What is a Debt Relief Order?
They are meant for people who have little or no spare income and they have a strict set of conditions that have to be met – you must owe less than £30,000 (this maximum limit is going up to £50,000 in June 2024), you can’t own a house etc.
In a DRO, you make no payments to your debts and your creditors can’t chase you. After a year, your debts are wiped out. The criteria are not flexible – you have to tick all the boxes or you can’t have a Debt Relief Order.
If you are unsure if you do meet the criteria, contact National Debtline. They can set up a DRO for you, and they can talk you through the other alternatives if a DRO is not possible for you.
The alternatives to a DRO
If you do meet the criteria for a DRO, will any of the alternative debt solutions be better for you? Each of the major debt options is discussed in detail in the Debt Solutions section, including their pros and cons and how to set one up, so this post just highlights the differences with a DRO.
A common theme through these comparisons is that the alternatives all have to be based on a realistic budget. You may be able to manage without buying any clothes or having an emergency fund say for a few months, but if it’s going to take years to clear your debts, then any alternative that demands you live on too restricted a budget should probably be ruled out.
Snowballing or a DRO?
Snowballing is only possible if you can pay at least the minimum amounts to your debts each month. If you can do this, then snowballing is going to be a better option for you than a DRO, as with snowballing you will end up with a great credit record. But in a DRO you have less than £75 a month spare income to pay off your debts, so snowballing is rarely going to be a possible alternative.
DMP or a DRO?
It is useful to divide Debt Management Plans into temporary ones and long-term debt solutions.
A temporary DMP is a stop-gap. Some common situations where you may need a DMP for a few months or even a couple of years include:
- recovering from an accident or illness that means you can’t work;
- job hunting after redundancy;
- knowing your child care costs will decrease a lot in a couple of years.
If after this short period you will be able to pay your debts, then a DMP is an excellent solution for you.
If you want to use a DMP as the way of clearing your debts, then work out how long it will take. If this is a few years, fine. But if you are only paying off £75 a month, then a DMP may take a very long time – the Financial Conduct Authority has described these long DMPs as unsuitable. If this is the case, a DRO is probably a better option for you, as it will clear your debts in a year.
IVA or a DRO?
I have looked at this case in detail here: Choosing between an IVA and a DRO.
Overall, IVAs are more expensive, uncertain and take longer than a DRO – there aren’t any situations where you should choose an IVA if you can have a DRO.
Some state benefits can appear generous. Your IP may have assessed your possible IVA contribution at say £95 because they have not allowed enough additional expenses because of your disability. You may, therefore, think that you won’t meet the DRO criteria – but you will!
Bankruptcy or a DRO?
There a few situations where it is better to go bankrupt if you could go for a DRO.
This include:
- if you have very poor records of your debts. Normally the adviser that helps you set up the DRO can help fill in most of the gaps, your credit record can be a good starting point. But if there could be many debts you can’t remember, then bankruptcy is more certain as it wipes out all debts, whereas a DRO only gets rid of ones that are listed.
- if you expect your situation to improve in the next 12 months – if it does than a DRO may be revoked, but bankruptcy would carry on.
Will debt collectors stop calling after a DRO?
what happens to joint debts in a DRO?
Improve your credit score after a DRO
Lynn says
Can I still apply for debt relief order even I lost my job?
Sara (Debt Camel) says
hi Lynn, yes you can. In a DRO you don’t have to make any monthly payments, so they work well if you are out of work and can’t afford anything!
John says
I fulfill the criteria for a DRO, and I earn about £19k p.a, I don’t own my own house. Would my salary affect the chances of obtaining a DRO or would bankruptcy be the better option?
Sara (Debt Camel) says
Hi John, if you meet the DRO criteria, including the “under £50 a month ‘spare income'” then you will qualify for a DRO, it doesn’t matter what your salary is. I suggest you talk to National Debtline as this article says – they have people that can set up DROs so they will check if you do meet the criteria.
Teresa says
Am I still allowed to run my company as a company director if I apply for a DRO?
Thanks
Sara (Debt Camel) says
Hi Teresa, no you can’t be a company director. I suggest you call Business Debtline https://www.businessdebtline.org and talk through your debt options with them.
don says
At the moment I am employed and earning about 12k per annum. My take home pay and my debts obligations are fairly evenly matched, I have missed a few loan / credit card payments but have a small surplus if I am lucky to get overtime. However my job is unsafe and if I lose it (there will be no redundancy) I will end up on benefits, a DRO sounds like my best option, do I get to choose the option, I don’t think IVA or bankruptcy is for me. Sadly I had an IVA 12 years ago.
Sara (Debt Camel) says
Hi Don, the answer to your question “do I get to choose which form of insolvency” is yes, providing you meet the DRO conditions. In your case this is likely to come down at the moment to how much “spare income” you have. If you talk to National Debtline or StepChange they will be able to assess this for you.
I also suggest trying to reclaim PPI immediately – put in claims for any credit you have had since your IVA even if you don’t think you had any PPI or you don’t think it was mis sold – you may be surprised! See https://debtcamel.co.uk/ppi-out-of-debt/
Stephen says
Hi there I am on benefits and got a iva going for both of us but can we do debt relief order .if you are on iva
Sara (Debt Camel) says
Hi Stephen, you can’t start a DRO if you are currently in an IVA. A DRO may have been a better choice at the beginning, but if you are now close to the end of the IVA, it will usually be better to try to struggle through for the remainder. If you are nearer the start of the IVA, it may be sensible to switch.
lisa says
How can you switch from a iva (mid way throughout ) to a dro please? Iva want to increase my payments whenever I earn more in a month so my they want my overtime money when I am already paying them as much as I can. It’s really getting me down. I’m paying and showing willing but they just want more and more from me! I’m renting, the debts are c 10k and paying £100 a month.
Sara (Debt Camel) says
Hi Lisa,
I suggest you phone National Debtline (0808 808 4000) or StepChange (0800 138 1111) and say you are struggling in your IVA and want to know if you meet the DRO criteria so you could switch. They will see if you meet the “less than £50 a month spare income” test – you may well do!
If you do, they can talk you through the pros (quite a lot) and cons(not many!) of switching and how to do this.
Faye says
I have an Iva but recent financial issues have left me with only £50 per month to pay them would I be able get a Dro instead carrying out my Iva?
Sara (Debt Camel) says
Yes, you would have to stop making payments to your IVA and let that fail – which can take a while – and then start a DRO.
However, if you are near the end of your IVA or these are only temporary financial problems, this may not be a good option for you. See https://debtcamel.co.uk/cant-afford-iva-payments/ . Asking your IVA firm to treat your IVA as completed or having a 6m payment break may be better.
But if you are in the first couple of years and your finances have really got a lot worse, or if you realise you should probably have had a DRO at the start, I suggest you should phone National Debtline 0808 808 4000 and they will check that you would be eligible for a DRO, as that is an important piece of information to know for sure!
Luke says
I am currently a company director but the company has been dormant for a while as I have been unwell – it was set up as a vehicle for IT contracting. If I dissolve the company is there a time restriction on when I can apply for a DRO? I am likely to qualify on all other grounds.
Sara (Debt Camel) says
I am not aware of any time restriction. If you don’t want the company it makes sense to dissolve it. But if you might in the future, then I do suggest talking to an advisor who can set up a DRO to double check you meet the criteria before dissolving it.
luke says
Thanks – is the impact on my credit score the same for a DRO as for a DMP or IVA? Will I ever be able to get a mortgage in my lifetime? I am 40 now and have never owned my own home.
Sara (Debt Camel) says
The impact on your credit score for a DRO is exactly the same as for an IVA or bankruptcy. Once your DRO year is finished you can start the “clean up” process (see https://debtcamel.co.uk/credit-file-after-bankruptcy/) but your credit score will not get to be good until 6 years after your DRO started, when it will disappear from your credit file.
DMPs and credit scores is complicated, see https://debtcamel.co.uk/dmp-credit-rating/. But if you meet the DRO criteria, then you can pay so little to a DMP that it will go on for a very long while and your credit score may be impacted even after 6 years, when it would be clean after a DRO.
This article looks at getting a mortgage after insolvency: https://debtcamel.co.uk/bankruptcy-iva-dro-credit-rating/. Here is DRO is better than an IVA as you will be able to start saving a deposit after your DRO year has ended. In an IVA it all lasts a lot longer so it will be longer before you can start saving – and aged 40 you want to get going as soon as possible.
Rat says
I spoke with a debt management company, my disposable income is less then £50, so they asked me to add my wife’s income in my iva calculations (but keep her out of iva). I have not signed any papers yet to complete the iva application. I just found out about DRO by doing some online research.
I am surprised why this was not mentioned to me.
If I get a DRO will I be able to get a mortgage later in life (after6-7 year)?…or will it be in my credit file for the rest of my life.
Sara (Debt Camel) says
I am depressed but not surprised your debt management company didn’t mention a DRO – they don’t make any money from DROs :(
There only difference between an IVA and a DRO form the point of view of your credit rating & getting a mortgage later is that a DRO ends after a year but an IVA takes 5 or more years – so you have more time to save up a deposit with a DRO :). See https://debtcamel.co.uk/bankruptcy-iva-dro-credit-rating/ for details
Andrew says
Hi, 2 questions that would concern me over a DRO- Would My tax code change as it would with going bankrupt? And therefore allowing my employer to find out?
secondly, about to go onto maternity leave which will mean my disposable income would be less than £50 a month, but 9 months later it will go back up meaning over £50 threshold. does this mean I can’t apply as would be not the full year.
Thanks
Sara (Debt Camel) says
Your tax code does not change in a DRO. But it’s worth pointing out that it is very unlikely your employer could tell you had gone bankrupt from the change in your tax code – there are many reasons why tax codes change and your employer is not told why a change has been made.
I’m a bit confused by your reference to “9 months maternity leave” – statutory maternity leave should be 12 months – and also by your name :) But to answer your question, normally when you return to work and have a small baby you will find that your expenses have increased a lot, so it’s a fair bet that if you are struggling with money now, you aren’t going to be over the DRO limit when you go back to work. I suggest talking to an advisor who sets up DROs about this.
Andrew says
Thank you Sarah! Sorry, I was speaking on behalf of my partner! yes, I guess after child care it would probably be there abouts looking at it again.
Thanks again!
Sara (Debt Camel) says
Get an expert to help you look at this – they will be used to asking you the right questions to work out your budget. You would be surprised how often this looks pretty different to the one you may have drawn up! I suggest calling National Debtline.
Andrew says
Hi, Would it be possible that our landlord would find out about a DRO unless he looked at the register?
Secondly, I owe around 18K and not sure if I should try a DRO as worried no high street lenders will accept is for a mortgage after 6 years are up?Would I be better off trying to offer a full and final settlement figure just before the defaults are about to drop off in 4 years?
Sara (Debt Camel) says
No one will tell your landlord (I am assumming you don’t have rent arrears).
Can you really save up money for full & final settlements then save a deposit for a house? You need to be realistic about these things. This article looks at credit ratings and mortgages after a DRO https://debtcamel.co.uk/bankruptcy-iva-dro-credit-rating/
Joanna says
Hello
I wonder if someone could tell me if having a child’s ISA for my son ( value about 8k) will rule me out from opting for a DRO.?
many thanks JO
Sara (Debt Camel) says
Your son having this ISA by itself won’t be a problem – it’s his money not yours and you couldn’t take it out even if you wanted to.
There may however be a problem if you put the 8k in the ISA for him in the last couple of years, because you will have been giving away money… I suggest talking to National Debtline (if you prefer phone advice) or going to your local Citizens Advice (if you prefer face-to-face advice) about whether you meet the DRO criteria.
Graham says
Could I get a dro even though I’ve had an iva for 2 years with 3 more to go
Sara (Debt Camel) says
Your IVA would have to fail before you can get a DRO. The best thing you can do at the moment is talk to someone who can advise you whether you meet the DRO criteria – I suggest National Debtline 0808 808 4000 or your local Citizens Advice if you prefer face to face advice. When you know the answer to that, you will be in a better place to make a decision.
Jenny says
Hi
I’m looking into if I’m eligible for a DRO. I’ve been in debt for over 12 years and just always seem to never get out of it. I work 7 days a week sometimes just to make ends meet as I’m
Proud to do the right thing and pay my debts but it’s getting me down and affecting my health and wellbeing now. I have repaid more than I borrowed by now but due to high interest rates I’m still 11k in debt and can’t see a way out other than working 7 days a week like a dog for more years. When at 36 I want to be able to start a family but can’t see a way out of having to work forever. I earn £28k now but am really struggling. Does the £50 monthly leftover for DRO mean AFTER you have paid your monthly debts or before you have paid them. Also I am
A dual citizen and it’s on the cards I may return to my other country within the year, do I have to remain in the uk for the whole 1year of a DRO to be eligible Even if my financial circumstances will be tight abroad as well?
Sara (Debt Camel) says
The £50 is before you pay your debts. But the question for you would be what would your income be if you worked a “normal” number of hours? I suggest you phone National Debtline 0808 808 4000 and ask them to help you look at your debts, see if you would qualify for a DRO or if you have any better options.
No you don’t have to stay in the UK for the whole DRO year.
Marian White says
Hi,
I was granted a DRO on the 14th June. The debts scheduled on it are from balances on my credit card statements dated 16th May and 9th June. I recieved a further statement from one of these on 16th June with interest and charges added on. Is any interest and charges accrued on these before 14th June but added to statements afterwards not included in the DRO? If so can I compel my creditors to give the exact balances on 14th June (they seem reluctant to do so) or is this not necessary?
Sara (Debt Camel) says
This shouldn’t be necessary – if you included the debt amount from your latest statement then the whole debt is included. The exception would be if you had used the credit card for a lot more spending after your last statement, but I assume you didn’t.
If you are worried, talk to the debt adviser who set up your DRO.
Marian says
Dear Sarah,
Thank you for putting my mind at rest and also for taking the time to help. It’s much appreciated.
Pam says
I have a shared ownership house, only 25% share. I paid £5000 and got mortgage for the rest, so mortgage is £49000. The purchase was done a year ago. I’m a single parent with one child of 7.
I have £17000 debt. If I applied for bankruptcy; would my house be sold and us made homeless, please? I have a job paying £27000/year from September. Right now I do agency work.
I want to stop the worries and get a fresh start.
Thank you for the reply in advance.
Sara (Debt Camel) says
You can’t have a DRO because you own part of this property. Bankruptcy may be an option, it will partly depend on what the property is worth now. Could you find that out then either I suggest go to your local Citizens Advice or (if you prefer telephone advice) ring National Debtline 0808 808 4000 and discuss your options.
Hazel says
Hi i currently have an I.V.A would i be able to cancel this and get a DRO
Sara (Debt Camel) says
If you are in early years of an IVA this may be a good idea – but you first need to be sure that you would qualify for a DRO. I suggest you should talk to National Debtline 0808 808 4000 about this.
If you are closer to the end of the IVA it makes more sense to try to get through tot he end or, if this is going to be imposssible, talk to your IVA firm about whether they could propose your IVA is completed early on the basis of the money you have paid in so far.
andreas says
Hi,
I am considering a dro but still unsure, I earn around 24k a year. But after I pay all my minimum payments on my credit cards and some unsecured loans I have hardly nothing, less than £50 a month after all my expenses and it’s really getting me down, I really want to sort out my debt issue.
Would I qualify for a dro? Do you think it’s the right one for me?
Sara (Debt Camel) says
HI Andreas, how large are your debts? how large are your current monthly payments?
When you say you have £50 a month left “after all your expenses” does this
mean after you have paid for food etc, or are you just looking at rent , utilities etc as
expenses?
Andrew says
Hi Sarah, DRO has been submitted but just realised that I have a council tax arrears that was being deducted from my partners employer. As the bill is in both of our names, I know this should have been declared. The amount remaining is just £30 which we have now paid through a 3rd party. this will take a few days to reflect on that account. just wondering if it will be ok to leave things as they are or will the OR check my council tax payments, as they don’t show on my credit report? many thanks
Sara (Debt Camel) says
It should have been declared, but if it was only £30, I can’t think this will be a problem as it’s not likely to have taken you over the 20k total debt limit. I suggest you tell the debt adviser that set up the DRO.
Michael says
Hi,
Firstly thanks for a great helpful and informative service, one of the best I’ve found online.
I am trying to decide between bankruptcy and a DRO.
I read somewhere that you can’t get a DRO if you’ve been bankrupt before, but do they mean within 6 years ago? I was bankrupt in 2003.
Also I read that if you have a pension of more than £300 you can’t get a DRO is that correct? I have a pension of around £10,000 that I haven’t paid into for probably 10 years.
I am a self employed man with van that does removals to Europe, and a combination of work drying up, profits halving because of transport comparison websites and van breakdowns have left me on the edge of no longer being able to pay the £400 a month in minimum payments to 3 credit card companies for debts of around £13,000. It will be hard to work out what money I have coming in and going out as it is so sporadic and random, but also my £2,000 van has a seized up engine and is stuck in Spain, if I repair it (if I can afford to) will they take it from me or will they see it is how I earn money and let me keep it? It is obviously worth less than the £1,000 threshold while it has no engine and is stuck abroad. I live with my mother and have no other assets, and can’t see my work situation improving much, I could survive without the debt repayments just but feel ashamed I have come to this situation a second time in my life, having large debts and nothing to show for it while all the while trying to work as much as possible just to stay afloat.
Many thanks in advance for any help you can give.
Regards, Michael
Sara (Debt Camel) says
You can have a DRO if you have been bankrupt in 2003. If your pension pot is worth less than your debts, this won’t stop you getting a DRO.
I suggest you talk to Business Debtline https://www.businessdebtline.org/ about your situation and your options. Variable income does complicate things – they can check whether you will qualify for a DRO.
jennifer says
Hi.im on a debt relief order.my brother wants to give me some money in my bank account,for me,my two daughters and sister.n more than £300.just worried incase they revoke my dro, if he does.
Sara (Debt Camel) says
I replied to your question in the comments on this post: https://debtcamel.co.uk/dro-income-up/
Cheryl says
I am around £15,000 in debt Im currently in a dmp but I dont have enough money left over each month to pay the amount the creditors think is acceptable. Payplan keep trying to adjust my outgoings but I dont even include christmas or a holiday weve not had a holiday in the past 5 years. My daughter is home schooled due to bullies & depression she has a horse & we pay for monthly stabling etc for her but this seems frowned upon if I applied for a debt relief order would it be refused becaue we own a horse?
Sara (Debt Camel) says
this is a complicated situation and I have emailed you if you would like to answer some detailed questions. But the simple answer is that any form of insolvency (bankruptcy, DRO, IVA) is likely to be complicated and may be impractical because of owning a horse and the monthly stabling costs.
Dean says
Hello Sara.
Just a quick question with regards to DRO’s, how does the land lie if I have a guarantor loan will this affect their credit rating if I entered into it?
Sara (Debt Camel) says
If you have a guarantor loan and you go into DRO, your guarantor will be asked to make the repayments. Provided they do so on time, your DRO shouldn’t affect their credit rating.
dale harper says
Can I apply for a dro if im in a debt management plan with stepchange??
I have a lot of pay day loans??
Is a dro the best solution ?? I owe about 9000
Sara (Debt Camel) says
what is your monthly DMP payments? are you renting?
have you looked at the my payday loans refund page, see https://debtcamel.co.uk/payday-loan-refunds/. Getting some refund back could reduce your balances or even give you money to repay other ones.
sam says
hi, i currently qualify for a DRO and so i am looking at applying for one, however, from september, i start university and so my student maintenance loan will mean i have more money… is this going to effect me in any way?
thankyou
Sara (Debt Camel) says
More money but also probably more expenses! You need to discuss this with the debt adviser who will be setting up your DRO. Good luck!
michael says
Hi ,
I have just moved back in with my partner after a 6 month split. She was declared bankrupt in Jan of this year . I am now dealing with christians against poverty for my debts which are around 9k. They have used a joint household income , however I would prefer this was done on my income as my partner is now bankrupt and we have no joint debts. Is this possible ?
I also wanted to look at doing a dro , but wondered when looking at disposable income does this include payment to priorty debts I have benefit overpayment and council tax debt . With cap they have suggested dmp paying a total of 170 to the council tax debt and 150 to the benefit overpayment (tax credits ) this then leaves 70 pound to pay my other creditors . This dosnt include my normal council tax payment of 45 a month . If I went fro dro would this mean my disp income is 45 a month ?
Thanks
Sara (Debt Camel) says
You need to talk to CAP about the alternative ways of doing an income /expenditure. It often doesn’t make a lot of difference, as if you partners income is excluded you also have to take out her shre of all the expenses.
In a DRO all your debts are included, so you wouldn’t make any payment to the debts. This means your disposable income would be several hundred pounds and your wouldn’t be eligible for a DRO.
Kris Taylor says
Hi
Not sure if a DRO would be my salvation please can you advise me. For 4 years or more I have been separated from my wife and 2 young children ad now live in a flat. Although she has not applied for a maintenance order I do buy and provide certain things for the children. Unfortunately I have multiple questions regarding my my expenses. Will they take into account that I contribute to my childrens well being. I own a car valued at less than £900 and work over 25 miles away, would they account for Insurance and tax etc or simply base it on local transport costs. Finally I have multiple debt agreements now in place but because of my low income my parents pay them for me to help out and unfortunately every week I seem to get another demand from someone going back years so they are at the stage where they can no longer assist. Will any new demands be considered in the Order. I have no assets and am constantly borrowing off parents from month to month. Your help would be so much appreciated. Thank you.
Sara (Debt Camel) says
Buying things for the children – this shouldn’t be a problem for a DRO but it will be much simpler if you just set up a standing order to pay your ex an amount each month. Provided this isn’t more than the governement guidelines (check the calculator here: https://www.gov.uk/how-child-maintenance-is-worked-out/overview) then this will be accepted as necessary expenditure for a DRO.
Your car – I would be surprised if you have problems with this. Talk it through with the adviser who sets up your DRO.
Old debts – are you saying you don’t have a good list of your old debts? You could check your records at all the credit reference agencies, that could help. You can now do this for free, see https://debtcamel.co.uk/best-way-to-check-credit-score/.
But if you miss a debt off your DRO it can’t later be included. So if you are really unsure you have a complete list, then bankruptcy may be a better option for you than a DRO as all debts, even those you have forgotten are wiped out in bankruptcy. The only downside of bankruptcy conmpared to a DRO for you would be likely to be the high fees. But perhaps your nice parents could help with those?
Kitry says
Hello. I have question. About to fill in the form, but on my month statement I have incoming money from my friend. He lends me money on certain occasions. Is that classed as my income?
Sara (Debt Camel) says
No, gifts from a friend are not income. Who are you filling in this form for?
Sian Gibson says
I’m struggling with debt and I’ve been in a dmp for 12 years would a dro be an option as I have another 12 years to pay my dmp. Thank you.
Sara (Debt Camel) says
With 12 years to go, you definitely need to look at your other options… are you renting? do you have a car, if yes, how much is it worth? and how much are you paying to your dmp each month?
Helen says
Hi,
I am on disability benefits and these are my only income.
I have spoken to national debt line who suggested everything but a DRO for 12k of debt even though you say if your on state benefits you automatically qualify for a DRO…
Please can you explain further… many thanks
Sara (Debt Camel) says
If you are on benefits, you should meet the “under £50 a month spare income” test for a DRO. There are other tests as well – have you asked National Debtline why you don’t qualify? What are they suggesting that you do?
Helen says
Hi,
They just said I had enough extra income to work out a DMP, (other options included IVA, Bankruptcy, self negotiation)… but that’s because I’ve cut back ie no internet cost/hobbies/leisure costs etc etc.
Sara (Debt Camel) says
How long would a DMP take? Are you getting disability benefits?
Helen says
My only income is ESA and PIP.
DMP would be 7+ years if I remained without any extras at all for that time (no hobbies/internet/leisure activities/meals out etc)
Sara (Debt Camel) says
Two options – go back to National Debtline and ask why they are being difficult about this. Or get yourself internet access and start generally spending a bit more and try again in a few months!
Helen says
Thanks very much – appreciate your advice. Your website is fantastic.
What paperwork will I need for a DRO?
Sara (Debt Camel) says
Your debt adviser will tell you what they need – usually a copy of your Experian report is needed as a check on your debts.
I don’t know what your disability is, but PIP is there to fund the extra costs you have, whether that is extra heating, extra use of the washing machine, paying for hairdressers appointments if you can’t wash your hair, paying for a cleaner if you can’t manage that, taxis to the supermarket once a week, higher food costs if you have to buy prepared vegetables or need a special diet etc etc
Helen says
Many thanks again! Much appreciated
Helen says
Hi, just wanted to say thanks for giving me the confidence to ring back up and question a DRO (I hate confrontation). I have now been sent an application pack.
Sara (Debt Camel) says
Good :) I hope it goes smoothly for you.
Morg says
I have applied for an IVA, and signed the paperwork. Nothing has been finalised yet. But after looking at my finances again, I don’t think an IVA will be the best option as I have around £50 a month left over. Am I able to cancel the IVA and switch to a DRO?
Sara (Debt Camel) says
You need to find out if you meet the DRO criteria urgently. Tell your IVA firm that you are not going to go ahead with this IVA until after you have taken further advice about a DRO – then talk to National Debtline urgently about this.
How large are your debts? What is your proposed IVA payment? I assume you are renting, do you have a car?
Morg says
I have about £11,000 debt. I don’t have a car and I’m renting. I’m a single parent and work part time so I’m in receipt of tax credits.
My employer also messed up my salary when returning from maternity leave and have been paying me too much money so I also have to pay them back.
Sara (Debt Camel) says
Unless you are pretty well paid, you may well qualify for a DRO, but the salary problem needs to be looked into – talk to National Debtline tomorrow: https://debtcamel.co.uk/more-information/where-to-get-help/.
Morg says
I get about £10,500 a year. And then tax credits on top. But after household bills etc I have next to nothing left. If I cancel the IVA and don’t get accepted for a DRO, then what do I do?
Sara (Debt Camel) says
Tell your IVA firm that you want the IVA put on hold while you look at other options.
On that level of income a DRO is very likely. If you aren’t accepted for a DRO it depends why – National Debtline will be able to talk you through your options.
Morg says
Thank you so much for your help
louise says
Hi, i have been told im eligable for a dro. Im currently working as a temp thats due to end in 4 weeks from then i will be claiming maternity allowance from the goverment. My disposable income is less than 50 each month whilst im working and also whilst im on maternity. I have no job to go back to. Not sure when to apply for a dro as stepchange advised me bankrupcy payplan advised once my job ends apply and the national debt helpline told me to apply for a dro straight away. Current debts 14k non homeowner (partners house) no vehicle or valuables. Thanks
Sara (Debt Camel) says
If your disposable income is under £50’now, that suggests there is no point in waiting until you are on maternity leave before applying.
But I don’t know why StepChange advised bankruptcy. There are some reasons why you may prefer bankruptcy to a DRO (e.g. You know you can’t get a complete list of your debts) but they are unusual – but I think it’s worth double checking to be sure, so I suggest you call StepChange and ask why they recommended bankruptcy and not a DRO.
louise says
Thankyou.
Yes my disposable income is less than 50.00 and will be when maternity starts. I know all my creditors all my account numbers and outstanding balances. They didnt give me a reason other than my circumstances may change once i go to work again (in which im not due to childcare cost) i was in a dmp paying 198.00 a month but that was based on a previous job earning allot more.
Payplan advised my left over income is 42.00 a month but advised me to get in touch once im on maternity. They seem to think i will have more money due to not paying childcare. But my income woukd be 500 a month less plus another baby!
To be honest payplan didnt seem interested at this point, and stepchange advised of token payment or bankrupcy.
I will get in touch with national debt line tomorrow.
louise says
Hi Sara
I double checked my budget calculations witj stepchange and they had an error on my income from wages which had my surplus at 72.00 thats why a dro was not offered. Having changed this my surplus is now 42 a month.
Not sure who to move forward with NDL have a 9 week wait for my application to even be looked at, stepchange advised aroind 3-4 weeks depending how quick i can get the paperwork in.
As NDL seem to request more supporting docs bank statements etc stepchange just advised upto date benefit award letter and my wageslips.
Im worried as i had confirmation my work ends august 31st but my maternity starts 17th sep (payment end of september) with NDL having a 9 week wait im thinking the process of a DRO is going to get very complicated with my situation changing twice in the 9 weeks. Am i best going with stepchange as by the time my application is submitted i will still be in my current situation.
Any advice please
Sara (Debt Camel) says
It’s good to have solved the StepChange mystery – gives you confidence your DMP will be approved.
I can see why the timing feels complicated. I would have thought StepChange, hoping to get it all sorted now before your job ends. But actually it doesn’t really matter, once you pick one and just work through their process, you will be in safe hands, they are used to getting people through these applications. Over 98% of applications are accepted!
louise says
Thanks very much. Think i will continue with stepchange and the DRO just to get it going quicker.
Great site my knowledge is getting allot better with debt etc.
louise says
Hi Sara,
Can you help with the following please. I have spoke to stepchange updated budget etc it did say i qualify for a DRO, BUT……… They advised that i might be seen to have a beneficial interest in my partners property, he owns it not me, the only bills i pay is tv and water 58 a month and 70% of the food shop, i have put nothing towards the house upkeep mortgage payments nothing. Anyway they are sending me the forms. Is it likely to be rejected because of the beneficial interest i may have?
Sara (Debt Camel) says
“they feel i have a beneficial interest on the grounds i looked after my daughter whilst on maternity leave in the mortgaged property my partner owns” I find this a bit baffling. It is hard to see how you can have acquired a beneficial interest during a period when you were earning less (presumably) than you were before. There may have been some miscommunication. Could you ask them to put this in writing?
Nicolas says
Hi,
I haven’t worked for over 12 months and my partner has been paying towards my debts. She now has decided she cannot do this because it impacts daily living essentials such as rent.
As the debt is solely in my name and I have no income, can I get a DRO or should I just go bankrupt? How long does it take because my bankrupt application is ready to go.
I have a car that is worth less than £1000 and I use it to take my theee children to 2 different schools that are 1.5-2 miles away.
My debts are £9-10k.
Sara (Debt Camel) says
Well you probably meet the assets and debts criteria, I suggest you talk to National Debtline to see if you meet the surplus income and other criteria: https://www.nationaldebtline.org/.
Bridie says
Hi. Im currently in year 3 of an IVA. Im having a 3 month break on my IVA as im signed off work and only recieving SSP.
I pay 160 pound a month on IVA , im private renting, have 1 dependant. Im really struggling with paying all bills on normal month. My debts are around 35k. What
options may be available to me?
Sara (Debt Camel) says
Has your situation changed so the £160 which was affordable at the start now no longer is?
IS there a reason you went for an IVA rather than go bankrupt?
Bridie says
Hi. Yes i was recieving more tax credits when first started. I have 4 children. 3 of which have now moved on. Last year they wanted me to pay 280 pound. I said there was no way i could afford. I was advised IVA would be better than bankrupcy. I did not have the lump sum needed to go bankrupt at start.
Sara (Debt Camel) says
Well I am going to point out the obvious, that it would have taken you less than 4 months IVA payments to save up the bankruptcy fee – if you had done this, it would have been all over by now.
You have a few months breathing space now. I suggest you contact a charity such as National Debtline and get them to work through what an affordable IVA payment would be when your SSP ends and you are back at work. Then, armed with that, you need to talk to your IVA firm about having a variation made to your IVA that reduces what you pay to an affordable amount. If this is rejected by your creditor, then you have to choose between a complete t=struggle to try to get through the rest of the IVA or having it fail and go bankrupt.
drew says
Hi, I am currently at the 7 week point for my payday loan complaints, me and my wife are going to enter into a DRO in next couple of month, is this going to affect me getting any refunds due from payday loans?? Or should it be fine as long as I put m complaint in before I enter the DRO??
Sara (Debt Camel) says
Your complaints won’t affect your wife’s DRO.
But you have to choose – you can either withdraw your complaints and go ahead with the DRO or you need to postpone the DRO until your complaints are finished. Otherwise a payday loan refund may result in your DRO being cancelled :(
How large are your debts? How large could the payday loan refunds be?
Colleen says
Hello I really hope you can help me. My partner at the time pressurised me into being guarantor for a £3,000 loan with Amiga Loans. I felt bullied into doing it and was violent throughout the relationship and controlled me. He’s threatened not to pay the monthly instalments and I’m now worried about how I’m going to pay if they hassle me for payments. I’m not at all well with long term illnessss and mental illness which is being made worse by the worry and stress.
Am I eligible to apply for a DRO due to my situation? I just don’t know what to do. I also have a £1,500 overdraft debt which again my partner forced me into giving him so I’m worrying about this too. Please help!
Sara (Debt Camel) says
If you have a DRO, you can include the guarantor loan and also an overdraft. Do you have other debts as well?
But another possibility that you should consider is going to your local Citizens Advice and asking for help because of the behaviour of your partner which amounts to financial abuse. The may be able to get you removed as guarantor and ask for the overdraft to be written off. If this doesn’t work, then they can help arrange a DRO if necessary.
Kelly says
Hello, I had a DRO 5 years ago and was keeping on top of my credit cards after being giving them 3 years ago, but in the past year I lost my job and been struggling to pay them I have looked into a IVA but they still want more then I can afford, am I able to do a DRO now or do I have to wait until the 6 years is up after I did my last DRO? Is there a way of paying the credit card people £5-£10 a month until I am able to do a DRO? I don’t want debt collectors at my door from capital one, vanquis credit cards and wonga and sunny payday loans they are the only debts I have.
Sara (Debt Camel) says
Yes you have to wait 6 years.
In the meanwhile you can offer token payments, see https://debtcamel.co.uk/token-payment-debt/
BUT in addition to offering the token payments, look at whether you have an “affordability complaint” against Wonga and Sunny… you may be able to get refunds of the interest you paid on loans from any payday lender see https://debtcamel.co.uk/payday-loan-refunds/.
Lindsay Evans says
Evening, I am currently in a debt relief order and I have been repaying a child tax credit overpayment which I have just repaid. The insolvency service agreed that I would repay this as I only had a few more months left when my DRO was granted. Now the overpayment has been repaid my tax credits have increased by £26 per week, however my daughter has now started nursery which is costing £22.50 per week in dinner money. Do you think this needs to be reported to the insolvency service? I thought that as insolvency had agreed that I repay what I owed then they would know this would alter my payments. I would really be grateful of any advice? On the calculations I had £30 left for the month.
Thanks
Sara (Debt Camel) says
I don’t think this is anything to worry about. You could ask the debt advisor who set up the DRO as they will know exactly what was said in your DRO application.
Neil Kingsman says
Hi!
I am currently in approximately £18,000 of unsecured debt.
I split with my wife 3 years ago and she is having the house we owned.
However, I am still on the deeds as her parents are buying me out. When I say buying me out, they are simply paying off the mortgage and giving the house to their daughter.
This is dependant on them selling a dead relatives bungalow which has already been on the market for 6 months.
Question, am I able to get an IVA if I can prove that I no longer own my house even though my name is on the deeds? Like I said this will change when they sell the bungalow.
I’m getting around 10-15 calls a day and letters every day.
Starting to struggle to sleep and it’s effecting my work and personal life now.
I need help, please.
Thank you.
Neil.
Sara (Debt Camel) says
Is there much equity in the house? Do you have children?
Do you have payments arrangements for the debts or are you just ignoring them, hence all the calls and letters?
How much do you expect to be able to pay to an IVA each month?
Beth says
Hi
I was told by cab I wouldn’t be able to apply as it was based on household income although my partner is in an IVA not my personal income I only get tax credits and child benefit and by your website believe I am able to still apply.
Sara (Debt Camel) says
That doesn’t sound right to me. I suggest you talk to National Debtline: https://www.nationaldebtline.org/
claudia says
Hi Sara!
Some help would be appreciated. Me andy partner have £16000 in debts atm, our HP xar was repossessed and sold in auction last month and we’re left with half the initial loan amount to pay. We have 3 young children and my partner is unemployed now. We have only benefits. Talked with NDL and someone from Credifix “sold” the IVA option to us but didn’t explain nothing about DRO. We’re renting but on a monthly renewal agreement that is worrying in case landlord decides to cancel the agreement and in a IVA or DRO we won’t be able to rent anywhere else. Also have a £300 worth car.
Our debts are divided into his name only ( tge biggest amount) one in both from CT arrears and around £1500 in mine from Vanquis and old utility bill. Don’t know what to do, IVA or DRO…. advice needed please! Thanks
Sara (Debt Camel) says
If National Debtline say you qualify for a DRO, then there are no advantages to an IVA. None.
In a DRO you don’t have to make any payments at all in an IVA you do for 5 years. And more than a quarter of IVAs fail, especially the low payment ones, because people simply can’t afford the payments for so long.
It is very poor of Creditfix not to have discussed the DRO option with you, just because they are selling IVAs they should still give proper advice :(
A £300 car isn’t a problem for a DRO.
Either a DRO or an IVA can be a problem for private tenancies, but do you have an option to carry on without one? If either of you get a CCJ that too would be a problem for renting. Unless there is a good chance your situation will improve a lot, it’s probably better to take the hard decision now and go for the DRO.
At least with a DRO you don’t have to make any payments. Don’t know what Creditfix were suggesting for an IVA payment,but if you go for a DRO and save up those £70s (or whatever) each month then after a couple of years you will have a nest egg that will give you some options such as paying 3 months rent as a deposit which can help solve tenancy problems.
Adam says
I`m currently in an IVA, and have moved in with my newish partner. As she doesn`t earn a lot I am paying most of the household bills as well as paying more to travel to work.
I`m starting to struggle, and she cant get more hours due to her health. Do you think I should look at my IVA failing ? If I went for a DRO how do I explain why I`m paying more than my partner towards rent and other household bills ? Thanks.
Sara (Debt Camel) says
How long ago did your IVA start?
When looking at how much its fair for you to pay for bills in a DRO, it usually depends on how much each of you earn. So if you earn twice as much as she does, it can be ok to pay 2/3 of the bills.
Steve says
Hi Sara. I had a DRO issued on the 30th June 2017, so it is nearly over. However, I’ve been offered a job which starts next week. Am I able to take it without having my DRO revoked? It is for 28 hours a week at £8 an hour. It would be silly to risk having the DRO revoked this close to the end, but it would also be foolish to let a chance of employment go, as it’s the first job that’s come up for me in the last twelve months or so. I don’t know what to do? Thank you for providing this helpful service!
Sara (Debt Camel) says
Will you be paid weekly or monthly?
Steve says
Monthly. Thank you for such a swift response!
Sara (Debt Camel) says
So you wouldn’t get paid until after your DRO had ended… I don’t think that will be a problem, but talk to the debt adviser who set up your DRO tomorrow if you can, it’s best to be sure and they will know your full situation.
Steve says
Thank you very much for your help. I’ll contact Step Change tomorrow. Nice one Sara, Steve
Carole says
Hallo. I am 67 and I have debts just over £20,000 and just under a year ago I went into a Debt Management Plan through StepChange. I am paying £55 a month for the 11 creditors. I have been on State Pension, Housing Benefit, Council Tax benefit, and Guaranteed Pension Credit. The debts themselves were mainly high-interest credit cards.
A few months ago, out of the blue, I discovered that I had a pension pot that was taken out 29 years ago. Apparently this pension was because I had contracted out of SERPS – however, I never realised that this meant that a pension would be taken out on my behalf.
I told the DWP and they are now trying to work out ‘notional income’ for the last 4 years (since I have been receiving Guaranteed Pension Credit) but of course, I never received anything as I didn’t know of this pension. They are dealing direct with my pension provider, who, at the moment is working out the annuity that I have opted for. So, (from what I have tried to understand from information online), I may have to repay thousands of pounds, which will have to come from my annuity income, and I will lose benefits, so may be far worse off than before.
I can’t see a clear way forward in any of this – stick with the DMP for now? Wait until my debts go under £20,000 then go for a DRO? Go into an IVA or bankruptcy and risk having my cats taken from me? Any advice, please? Thank you.
Sara (Debt Camel) says
This unexpected pension – do you have an option that take some of it as a tax free lump sum? And will it be backdated, so you get a lump sum from that? Either of those could give you the money to pay off the amount you may owe the DWP.
Was your plan always to go for a DRO when your debts dropped below 20k? Has interest been frozen on all your debts?
An IVA sounds like would be a very foolish option for you, you have no assets to protect, you should rule that out.
“Lose your cats” this isn’t going to happen in bankruptcy!
Caroline says
Hello, I have as IVA for 15months and my payments have gone up from £123 to £193 a month. I’m struggling to pay as I’ve lost my ex partner s £100 a week maintenance income . I’ve emailed payplan a number of times with change of income changes bills gone up tax credits gone done& I worked my outgoings out& I have a short fold of £148a month. I need to fail my IVA and at DRO. How long does it take after failing My IVA to start a DRO ? Caroline
Sara (Debt Camel) says
Read Should I change to a DRO from my IVA?.
As that says It’s really important that you get advice NOW on whether you will qualify for a DRO now, don’t just assume you will (I’m not saying you won’t, just that this is so important to get right)
Timescale – it will take a few months for your IVA to be failed, once that process is started of, you can start the DRO application process which usually takes 8-10 weeks, so that it is ready to go soon after your IVA has failed.
Carroline says
Thank you for you advice sSara
Jacob says
Hi Sara,
Currently considering a DRO, however I’m conflicted as to what debts I owe to what creditor. Noddle is showing me 10.5k with 8 different creditors which sounds about right but I also had a credit card with MBNA which is not on there I think. ClearScore is only showing me 2 open account totaling up to 800 pounds and experian currently is blank??
Honestly I havent paid anything to anybody since my DMP got cancelled in late 2015/ early 2016 i believe. Now, it’s been a while and Im not willing to wait for them to be statue barred. I’d rather enter a DRO despite being on decent wage but my rent arrears and bills are just so on top of me I cannot imagine paying a DMP at the moment. I have perhaps £30 after all expenses.
My question is, I did read your article regarding debts on credit records but I do not want to enter into a DRO and have debts left over.
Should I contact every creditor I can think of and ask for a statement for my DRO to cover it fully?
Sara (Debt Camel) says
I suggest you first have a conversation with a debt adviser to see if you are likely to qualify for a DRO – it would be a mistake to phone up all your creditors and wake them all up and then find you can’t get a DRO!
After that, yes it is a good move to contact all possible creditors. Debts not listed on a DRO will not be included in it, so it’s worth putting in the time to track them all down.
Jacob says
Thank you very much, in addition to my previous comment. Would me contacting creditors to make a complaint for irresponsable lending be considered as acknowleding the debt? Reason for me asking is defaults were registered almost 3 years ago and im currently in process of claiming compesation against 5 lenders.
Sara (Debt Camel) says
You should assume that making an affordability complaint counts as acknowledging the debt.
You also now need to wait until your 5 complaints are finished before thinking of a DRO, or a refund could lead to your DRO being revoked. Any chance of a PPI refund? now is the time to look at that too!
Helen says
Hi I lost my job due to ill health and I’m now on benefits. I have been advised to take a DRO and I wondered if I should contact my landlord about this and the fact I am on benefits as I am worried I oculd be evicted. My rent is being paid through my benifits but I’m worried this will affect my tenancy. I can’t see anything in the agreement to say it would.
Also how would it affect future chances of renting another house?
Sara (Debt Camel) says
Do you have any rent arrears?
jake says
Hi
I am half way through my DRO 12 month period. My support worker thinks I should apply for pip care as my needs have changed. I live in a full universal credit area but am on ESA support group still. As I understand it because I am on esa , if I qualify for PIP it would still attract the disability premium of esa. I understand the actual pip amounts are offset by the statement of financial affairs for the official receiver in terms of care needs but what about the disability premium ? When I applied for dro I was on low mobility dla and esa support. I am wondering if it would be just better to struggle on for now and not proceed.
Sara (Debt Camel) says
Hi Jake,
Have you talked to the adviser who set up your DRO about this? Normally I would not expect a problem but someone who knows the full details of your case is in the best place to advise you.
Jake says
Thank you Sara,
I will try to speak to the advisor, although my understanding from previous communication with them left me feeling it was very much my responsibility to negotiate/inform DRO unit of any changes once the DRO had been processed.
Thank you very much again.
Brenda Godfrey says
Hi. My husband and i, are 80 and 70, income is state pension, small private pension, and attendance allowance for my husband. I have 4 credit card debts, in my name only, that we now cannot afford to pay , was using Attendance Allowance and some savings, but this is no longer possible, and im not sure using attendance allowance was the correct thing to do.
How do i do a DRO in my name only, as obviously i only get my state pension. Advice on what to do please.
Sara (Debt Camel) says
Hi Brenda,
if you would like to talk to a debt adviser on the phone, I suggest you call National Debtline on 0808 808 4000. If you would prefer to meet the debt adviser, the best place to go is a local Citizens Advice – is there one near you?
Citizens Advice could also help look at whether you could get any other benefits as well.
Kate L says
Hi Sara, iv a question about DRO and IVAs
Do you know if i could potentially get accepted for a DRO or IVA if i gave wrong information on loan and credit card forms?
For example, my salary – i earn around £12k but on the forms i said £28k (i do get child tax credits per year totalling approx £6-7k which i guess brings my total yearly amount to approx £19k thats if tax credits can be classed as income – they are paid out every month however to childcare facilities)
I also listed 0 dependants – partly because id been told id have more chance getting loan or credit card without dependants, and then partly because i actually dont have the money to contribute to any of their financial needs….my husband pays for everything to do with them….bar food, i buy groceries for our home.
Hope you can help.
Sara (Debt Camel) says
I wouldn’t worry about the dependent aspect if your husband covers all the costs.
How long ago did you take out the loans and credit cards?
Kate L says
Hi Sara, the loan was taken out approx 18 mths ago & the credit card 8 mths ago.
Im just worried incase at the end of a DRO (if im accepted) the loan & card debt would still be there….thats what iv read recently.
Sara (Debt Camel) says
I asked how old the debts were because your situation would be rather different if you had taken a loan 6 weeks ago and not made any payments to it. Then the overstatement of your income (tax credits should be included as income by the way), not having made any payments and going for a form of insolvency (DRO, IVA or bankruptcy) could look a lot like fraud.
But that isn’t what has happened, is it? Fraud requires a dishonest intention, but presumably you didn’t intend to repay the money when you borrowed it and have probably made some repayments?
It’s correct that a debt which is listed on a DRO application is not written off at the end of it if it was fraud. But this is VERY RARE for any debts with the exception of benefit overpayments. I don’t think you will have a problem with this. I suggest you talk to National Debtline about whether you qualify for a DRO.
Sara (Debt Camel) says
You also asked about IVAs. The same issue about whether what you have done can possibly be termed fraud arises.
If one of these debts was fraud and it was included in an IVA, the creditor can argue that it shouldn’t be written off at the end, so you would be in the same position as for a DRO. But creditors also have to approve an IVA, so if the creditor who was unhappy about your debt being fraud had more than 25% of your debt, they could also simply vote against the IVA and it would never be approved.
In practice the IVA route seems more difficult for you than a DRO.
Ignoring the potential fraud aspect, you should focus on the fact that if you qualify for an DRO this is always the best debt solution for you. You pay massively less, it is over quicker and they rarely go wrong. More than a quarter of IVAs fail.
Kate L says
Oh….just one other thing Sara, with a DRO – a car which i need for work, cant be worth more than £1000.
At present, my car is worth more than £1000….but not by much – maybe £2200. Would it be a possibility for my husband to buy this from me but for me to still use it for work. So, he would be the owner & registered keeper at our home address….but i would be insured to drive it? Im just trying my best to get things organised as best i can should it come to me going DRO.
Sara (Debt Camel) says
Do you have a Parkers valuation? https://www.parkers.co.uk/, use poor state of repair.
Yes your husband can buy the car for what the parkers valuation is. You would then be expected to use the money over £1000 to repay your creditors, then go for a DRO. National debtline can explain this to you in details, including how much you should pay to each creditor to be fair.
Kate L says
Hi Sara….me agin 🙈 can you tell me if you think this might stopme getting a dro.
11 years ago my ex and i split up – we owned a house together purchased for £267,000 when we split up he took sole responsibility for the house & mortgage. His salary is around £120k so he could easily afford to do this…my salary is £12k He lives in far east now & the house is rented out – he tops up the rent to cover the mortgage etc.
However, when we split up 11 years ago the house was in negative equity by around £130,000 and even today it is still in negative equity by around £80,000. Hence, why he tells me he cannot remortgage in his sole name.
About 6 years ago he threatened to stop paying the motgage if i wouldn’t sign house to him….we had papers drawn up with solicitors to state that he basically owns the house 99% However, it is listed that i am still a 1% owner & i am on the mortgage account altho i haven’t had any financial dealing with it for 11 years.
My question is, would i still be able to go for a DRO?….as i know if you if you own a property you can not…..but given my circumstances that i actually really dont own it.
Sara (Debt Camel) says
Yes that is a major problem. You can talk to StepChange but you will probably need to apply for bankruptcy instead of a DRO.
Kate L says
Thats what i thought 😔
I should have just let him stop paying the mortgage all those years ago & went bankrupt then…it would all be behind me now!!…hindsight eh!!
Thanks for all the info. Much appreciated.
Mrs Katie says
Hi Sara, me and my husband we’re looking at bankruptcy but I was speaking to a debt agent last night on a chat and he suggested I do a DRO instead (£11,000) and my husband does the bankruptcy (£35000) but I’m worried about loosing our family car we have just brought for £1900 if I do the DRO is there any chance I would be able to keep it given we have 4 children and I’m my parents career? Or is bankruptcy more lenient on this?
Sara (Debt Camel) says
Who paid for the car? Who is the registered keeper?
Mrs Katie says
I am the keeper, we paid for the car with the sale of our old one which needed £1000+ spending on it so we sold it to we buy any car (we didn’t disclose the issue) but they didn’t ask either and we used my husbands extra wage (He’s paid weekly) from Dec and my extra child benefit towards it.
Oh I’ve done the parkers valuation too and it says £980 for the car we have just brought 🤔
Sara (Debt Camel) says
In that case you may not have any problem in a DRO. You and your husband both need to talk all these points through with a debt adviser. Who have you been talking to?
(Sorry I have changed your name as I didn’t want to get confused with 2 Kates posting about different problems!)
Mrs katie says
Ha no worries was getting confused myself 😂…. just spoke with someone from step change in an online chat so I have £9080 debt I have filled in both mine and my husband’s bankruptcy forms online just need the money now…. and I can mull over the DRO idea so on parkers it said £980 in the not good con then £1300 for reasonable con don’t know which they would go with as it is in very good condition if im honest but unless they call and check out the car how do they know? (Do they) …
Sara (Debt Camel) says
It’s normal to use poor condition. No one calls or asks for photos or anything. Of course you paid more – the value you use is what you could sell a car for, not what’s dealer would charge for it.
I suggest you talk to StepChange about a DRO, they take about 10 weeks to set up. So get that process going – and see if you do meet all the other DRO criteria – while you save up the bankruptcy fees for your husband. https://debtcamel.co.uk/help-with-bankruptcy-fees/ May have some ideas to help.