What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

[Legal Beagles]

Debt Relief Orders Debt Relief Orders (DROs) are one way to deal with your debts if you owe less than £15,000, have little spare income and don’t own your home. If you get one: your creditors can’t recover their money without the court’s permission you’re usually freed (‘discharged’) from your debts after 12 months Get […]

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[PAWS]

Re: Debt Relief Orders – Options for paying off your debts – GOV.UK

At first glance this looks like a good idea but…..
When it states that the creditor cannot recover their money without a court order; is that not the case anyway and what will prevent them chasing the balance after the year is up or taking the debtor to court during the year. They are not supposed to take many people to court or harass them in certain circumstances but they still do.
Also; there is something ‘stocks in the village green’ about the Individual Insolvency Register being available for all and sundry to read. Many people are mortified at the thoughts of their neighbours, friends etc. knowing they are in financial trouble. Putting their name on a list that anyone can trawl through is almost as bad as branding them!
If a person has less than £50 to pay back per month, then over one year it will only amount to £600. I cannot see most of the OLs and DCAs we hear about on LB accepting £600 as a settlement for a £10k debt!:lol:
Sorry, I always seem so negative but, well you know the old adage; if something is too good to be true it usually is!
Ah for the days when I had a broad mind and a narrow waist.ray2:

[FlamingParrot]

Re: Debt Relief Orders – Options for paying off your debts – GOV.UK

At first glance this looks like a good idea but…..
When it states that the creditor cannot recover their money without a court order; is that not the case anyway and what will prevent them chasing the balance after the year is up or taking the debtor to court during the year. They are not supposed to take many people to court or harass them in certain circumstances but they still do.

Unlike a DMP or payment arrangement, where creditors can still take debtors to court despite them keeping up their agreed repayments - an example is Ms Mayhew, who was making regular payments to Santander - DROs are legally binding. They are a form of insolvency not unlike bankruptcy, where the debts are written off at the end of the DRO. As with BR, most debts can be included in a DRO. Creditors can't take you to court for a debt included in a DRO anymore than they can for one included in someone's bankruptcy.

Also; there is something ‘stocks in the village green’ about the Individual Insolvency Register being available for all and sundry to read. Many people are mortified at the thoughts of their neighbours, friends etc. knowing they are in financial trouble. Putting their name on a list that anyone can trawl through is almost as bad as branding them!

Being a form of insolvency, a DRO is likely to have an impact in your life, for example, it can affect current and future tenancies as well as job prospects.

If a person has less than £50 to pay back per month, then over one year it will only amount to £600. I cannot see most of the OLs and DCAs we hear about on LB accepting £600 as a settlement for a £10k debt!:lol:

It's not up to them to accept or decline, a DRO is not an IVA where 75% of creditors have to agree. A DRO is like a 'junior' form of BR, for people with lower incomes, few assets and a limited amount of debt, and a lot cheaper than BR.

Sorry, I always seem so negative but, well you know the old adage; if something is too good to be true it usually is
Ah for the days when I had a broad mind and a narrow waist.ray2:

DROs are not exactly hot news, they've been around for years. There are a number of restrictions associated with a DRO, along the same lines of those associated with BR.

[PAWS]

Re: Debt Relief Orders – Options for paying off your debts – GOV.UK

Thanks for that FP. I have never come across them before.Could be a good solution for a lot of people and I am surprised more people don’t know about them.:thumb:

[FlamingParrot]

Re: Debt Relief Orders – Options for paying off your debts – GOV.UK

Thanks for that FP. I have never come across them before.Could be a good solution for a lot of people and I am surprised more people don’t know about them.:thumb:

DROs have to be arranged through an approved intermediary such as the CAB, National Debtline or the 'official' debt charities Stepchange and Payplan. If you approach any of the official organisations looking for help with your debts, they are likely to mention them if they think they may suit your circumstances. The organisation in question will check your eligibility and suitability.

The criteria for eligibility is quite stringent, if you opt for BR you may be required to sell certain assets, with a DRO, rather than making you sell them, you just wouldn't be eligible if you have assets over £300 and/or a motor vehicle worth over £1,000. A number of household items such as cutlery, crockery, cookers, televisions, beds or furniture do not count as assets and any assets are valued based on resale value rather than how much they'd cost if bought new. If you own property you wouldn't qualify.

Disposing of assets before applying for a DRO (up to a year earlier) can result in the DRO being revoked and/or being subjected to a restrictions order or undertaking (DRO or DRU). In serious cases, you could be prosecuted. :mod:

[PAWS]

Re: Debt Relief Orders – Options for paying off your debts – GOV.UK

I suppose the people who it applies to would be inclined to go to the CAB etc. It is sad to think that many actually sell off their assets just to appease their creditors or even feed themselves before they finally seek help. I know the criteria for acceptance must be strict as the amount repaid may be such a low percentage of the principle owed.
From what I have discovered many thousands of debtors would qualify. This would change many people’s lives and get the most vulnerable away from the Pay Day sharks by leaving them enough to live on. They would also be in a position to put an x on a calendar and say ‘on this day I will be free from debt’ and the harassment would stop immediately.
I wonder if anyone out there has been let down by these. In all my badgering of organisations and ‘the powers that be’ I have been told about all sorts of different solutions from the banal to the bizarre and never have I heard of this before.
I will hand the details(apply through CAB etc.) on to a very special chap who deals with people contemplating suicide –many of whom are in a dire financial situation due to debt. This info could do more than change lives; if it is really working it could save them.
I have said it before on this site and I will say it again –people like you guys on here have no idea just what a huge impact you have on people’s lives.

[PAWS]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

Oh dear; opened a can of worms with this one! Apparently most of the people contemplating suicide because of debt would not qualify for this. A large amount of people contacting helplines / websites because they cannot cope with debt, are middle earners. Or should I simply say earners. I.e. not at all what one would consider affluent although the leafy city of Bath is the debt capital of Britain when it comes to High street lenders. People on a modest income who suffer even a temporary reduction in income or a minor crisis can wind up being battered and harassed. As we know many of the high street banks sell off their debts to parasites who are particularly vicious. It is tough to think they will not qualify just because they will not sell their home of x number of years, their kids have a computer or they do not want to part with their mother’s jewellery. I do understand though that the conditions of a DRO have to be pretty strict. Just a pity that many people fall between the two stools.:sad:

[FlamingParrot]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

DROs are a form of insolvency for people on low incomes who basically have nothing to lose. It's by no means a quick fix, like I said above, it's not dissimilar to bankruptcy, with all the strings attached to a drastic solution like that.

There are, however, ways to deal with your debts that are nowhere nearly as drastic. I know someone who used to be on here with debts of £150k :scared:

Theres absolutely no reason to think about suicide just because you are in debt! :scared: The problem is that people allow themselves to be intimidated by threats from creditors, :mad2: when there's a way to deal with any debt, even if they take you to court, as can be seen on here. :thumb:

The absolute worst thing that can happen to anyone as a result of being in debt is to be made bankrupt, yet that can also be a relief from your debts, given that most of the debt would be written off and you could start again with a clean slate. For that reason, you have the option to petition your own BR if you so wish, and this is what you'd do if you wanted to go down the insolvency route and didn't qualify for a DRO.

The other alternative would be an IVA, also a form of personal insolvency best suited to homeowners, but one that has a number of disadvantages, not least the need to be able to keep up repayments for five years (or potentially face BR if the IVA fails), and part of those monthly payments going towards the IP's fees, which over the course of the IVA can be in the region of £6-£7k!

It's always a question of looking at all the options. A CCJ is not the end of the world but can make life difficult for some, in particular those whose current and/or future employment is likely to be affected, however, any form of insolvency would have an even worse impact for those people. :sad:

There are legally binding alternatives that could save them from a CCJ if the get taken to court, such as Tomlin Orders. :thumb:

[PAWS]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

Oh Gosh, sorry FP; I don’t want you to think I’m suicidal –I know someone who works with people who are contemplating suicide and It is alarming how many are in that state because of Debt. I also knew someone very close to me who did commit suicide and she actually had a demand from a (now assumed to be fake) solicitor in her hand when they found her body. I have had debt issues in the past and an ongoing battle that is, for the moment under control (but stand by for fireworks).
My main reason for this particular post and actually many of the points I make is to highlight and help those who are teetering on the brink with no way out. I never stop wishing my friend had found a way of confiding or discussing her problems. I will not go off on a tangent on that one!
You are a star for posting up all that info.Who was it who said ' the more I know, the more I know I don't know'?!!!

I suspect many of the people coming on lately looking for help have been referred here. I know many of the organisations such as Step,cab etc. do help but the feedback I get is that they do not quite give the debtor the impetus and optimism they get from sites such as this. I don’t know,perhaps it is the chance to fight back or do something for themselves that is positive but whatever it is, it works. Also they are getting advice as part of an anonymous community. They know they are not the only people in that situation, they know they are not going to be patronised, criticized or looked down on. And never, never underestimate the value of total anonymity!

[FlamingParrot]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

The official organisations are not so geared towards fighting as they are towards getting the debtor to repay. They are good if you want to go for an official solution like BR or a DRO but if you went to one of them saying you'd received a claim, they'd ask you if you ever had the card, loan etc. and if you said you did, they'd just tell you to admit the claim and put forward an offer of repayment. They wouldn't be so keen on telling you to defend on the basis of non-compliance with a CCA request, etc. and probably wouldn't even suggest a Tomlin Order to avoid a CCJ. Their view would be if you borrowed the money and failed to pay it back, you should live with the consequences. :sad:

If you have debts you've not been taken to court for, they'll ask you how much you can afford to pay every month towards them and try to arrange a DMP, if you haven't got enough spare income for that, they may well say you have to go BR.

You won't get input from others in your situation or hear a variety of opinions as you do on here. :grin:

With the CABs, the quality and type of advice you get varies wildly depending on which office you deal with and who you speak to. :ohwell: Free DMP providers like Stepchange and Payplan are funded by the credit industry.

[FlamingParrot]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

Oh Gosh, sorry FP; I don’t want you to think I’m suicidal –I know someone who works with people who are contemplating suicide and It is alarming how many are in that state because of Debt.

I didn't think you were suicidal, or I'd have replied in a different way if I'd got that impression, would have been a lot gentler and less abrupt in my response and said you had other, more important things to consider like your family, etc.

I also knew someone very close to me who did commit suicide and she actually had a demand from a (now assumed to be fake) solicitor in her hand when they found her body. I have had debt issues in the past and an ongoing battle that is, for the moment under control (but stand by for fireworks). :eyebrows:

That really is sad :sad: and one very good reason to spread the word about sites like this one. :director::director::director:

Let's hope the FCA does what the OFT never did: force the credit industry to behave as they should. :flypig: :flypig: :flypig: :flypig:

It should be a criminal offence to send such letters by pretend solicitors, what would happen if I started doing something similar?

[PAWS]

Re: What is a Debt Relief Order? – Options for paying off your debts – GOV.UK

Oh you star! You know your smilies really make my day! I had to roar laughing when I saw that even in prison you would still have to do the housework –Absolutely priceless!msl:
Your knowledge is fantastic –and the fact that you share it an absolute gift for the rest of us.
Stay cool! And thank you once again