If it's getting hard or impossible to afford your IVA , you may wonder what your other alternatives are. If you don't own a house and your debts are under £20,000 you may qualify for a Debt Relief Order (DRO). Your IVA may have been sensible when it was started, but a change in circumstances (pay drop? rent increase? new baby? separation?) may now be making it hard to afford the payments. Or … [Read more...]
Articles on Debt Relief Orders (DROs)
Debt Relief Orders (DROs) are described in detail here A Guide to Debt Relief Orders. That lists the conditions for getting a DRO - your total debts have to be less than £20,000), you can't own a house etc - together with their advantages and disadvantages and how to set one up.
DROs are a form of insolvency so don't consider one if you only have a temporary debt problem. But if your debt problem is serious and you meet the DRO criteria, then a DRO is very often the best possible solution for you.
How to improve your credit rating after a DRO
A Debt Relief Order (DRO) only lasts for a year and then your debts in it are wiped out. But it will be shown on your credit record for six years. This article looks at what should happen to your credit record during the year of your DRO and at the end of it. If some of your creditors have go tt this wrong, you need to ask them to correct any problems. And finally it looks at how to start to … [Read more...]
“If I get a payday loan refund, what will happen to a DRO?”
A reader, Mrs H, asked: I am thinking of applying for a Debt Relief Order (DRO) but I have made some payday loan refund claims. If I am win these will I still get the money if I have the DRO? This article looks at the general problem of getting this sort of refund. It also applies to PPI refunds - many PPI claims sent in just before the end August 2019 deadline are still waiting for a decision. … [Read more...]
“When I am made redundant, should I go for a Debt Relief Order?”
Ms G asked: I have about £18,000 of debts which I can't afford to pay after my partner left. I am part-time at work, with very little money and renting, but I have been told I will be made redundant in November. I should get about £2,500 redundancy pay and I will need that while I look for a proper job - I won't get Universal Credit straight away. So is it best to wait and apply for a Debt Relief … [Read more...]
“What happens to a DRO if I move in with a new partner?”
A reader asked: I’m a single parent and have had about 10k of debts in a debt management plan for several years. I’m on low income and it looks like it will never end plus I have got some further debts. Now I’m considering a Debt Relief Order (DRO). But I met someone and I’m thinking about starting to live together. I don’t want to tell him about my debts and really want to sort this out … [Read more...]
DROs – what if my pay increases or I get a lump sum of money?
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 Official Receiver (OR) may 'revoke' your DRO. This … [Read more...]
Which is better a DRO or an IVA? There is a very simple answer!
Everyone has heard of bankruptcy, but Debt Relief Orders (DROs) and Individual Voluntary Arrangements (IVAs) are less well known. Here is a comparison of IVAs and DROs, so you can see would be better for you. DROs and IVAs were the two most common types of personal insolvency in England and Wales in 2019. Some choices between debt solutions are genuinely hard. When I wrote … [Read more...]
You both have debts – but may need different debt solutions
You both have debts, you both know it's time to tackle them and you want to do this together. But if one of you has a lot more debt, or a much larger income, or you own different assets, you don't have to have the same debt solution. A good debt adviser will help you look at what option each of you needs to get the best result for your family going forward. This article looks at some of … [Read more...]
DRO applications – frequently asked questions
A Debt Relief Order (DRO) is often the best debt solution if you have under £20,000 of debt, you are renting and you have hardly any spare money to repay your debts. You don't have to make any payments in a DRO and, after a year, your debts are wiped out. You can't apply for a DRO yourself, the application has to go through a debt adviser who is an Approved DRO Intermediary. In this article, … [Read more...]
Inheriting money when in a DMP, DRO, IVA or bankruptcy
What happens if you inherit money when you are in debt management or one of the three forms of insolvency: Debt Relief Order (DRO), bankruptcy or IVA? The answers are surprisingly different... Inheriting in a DMP This is the easiest case. Any money you inherit comes to you, not to your creditors or your DMP firm. It doesn't matter if the person dies before your DMP started or during your … [Read more...]