Debt relief order.....

[Jennie wren]

Hi all

I am separated from my husband, we are going through a divorce. I have an interest logged in the marital home which is in his sole name. I am considering applying for a Debt Relief Order so that after 12 months, if I still dont have the capacity to pay my debts it is written off. Does anyone know what, if any, impact this would have on the property? My soon to be ex husband informs me that if I apply for this it will allow my creditors to put orders on/force sale of the house? Does anyone know if this is correct?

[labman]

Re: Debt relief order.....

This link gives a reasonable summary of DRO's:

http://www.adviceguide.org.uk/wales/...ief_orders.htm

The first step is to make sure you do actually qualify, as conditions are fairly strict.

[Jennie wren]

Re: Debt relief order.....

Thank you Labman, much appreciated. I have had a look but it doesnt answer my specific question. I know that, if I am paid out from the marital home that I would have to inform of them of the change but what I need to know is if it will effect the property now with it being in my soon to be ex's name....he seems to think it does. I would have thought it would only effect myself if/when I am paid out.

[labman]

Re: Debt relief order.....

Please don't take this as 100% correct as it is not a definitive answer, just my view on it.

You would have to declare an interest in the house on entering the DRO as it is, without question, a significant asset you have, albeit one that has not yet been realised and paid out to you.

As you have this asset, a court may apply for a charge over the property in order to secure any debts you have (I assume you are eligible?). Options available beyond that could not really be commented on at the moment as we don't know the circumstances in sufficient detail. I suspect your estranged husband is right in thinking the property will be taken into consideration though.

[FlamingParrot]

Re: Debt relief order.....

Hi all

I am separated from my husband, we are going through a divorce. I have an interest logged in the marital home which is in his sole name. I am considering applying for a Debt Relief Order so that after 12 months, if I still dont have the capacity to pay my debts it is written off. Does anyone know what, if any, impact this would have on the property? My soon to be ex husband informs me that if I apply for this it will allow my creditors to put orders on/force sale of the house? Does anyone know if this is correct?

Before deciding on this course of action you should also look at the alternatives. It does sound very simple, having debts written off after 12 months, however, a DRO is a form of insolvency just like bankruptcy, only cheaper to apply for (and with much more restrictive criteria).

You can't have assets worth over £300 (with the exception of a car worth no more than £1000), you say you have an interest in the marital home, which could be considered as part of your assets:

If your assets are worth more than £300, or if you have a motor vehicle worth more than £1,000, you won't be able to apply for a debt relief order.
Examples of assets include savings, vehicles, shares, antiques and property. This means that if you own a property, it's very unlikely that you will be able to apply for a debt relief order.

As with all forms of insolvency, there are restrictions regarding what you can do and duties to supply information to the OR. It would be good if you could tell us a bit more about your debts, what they are for and how you came to be in debt. This is so we can look at the alternatives. Amongst the criteria for a DRO is that your debts should be under £15k, I have debts of just over that amount which I haven't paid in over 3 years and they will be Statute barred in less than 3 years. Personally, I wouldn't have considered any official form of insolvency, but it all depends on your debts and your circumstances. :thumb:

[FlamingParrot]

Re: Debt relief order.....

Please don't take this as 100% correct as it is not a definitive answer, just my view on it.

You would have to declare an interest in the house on entering the DRO as it is, without question, a significant asset you have, albeit one that has not yet been realised and paid out to you.

As you have this asset, a court may apply for a charge over the property in order to secure any debts you have (I assume you are eligible?). Options available beyond that could not really be commented on at the moment as we don't know the circumstances in sufficient detail. I suspect your estranged husband is right in thinking the property will be taken into consideration though.

Wouldn't this asset automatically disqualify her by putting her above the £300 limit? :noidea: