Hi

My husband has been advised by StepChange that a DRO would be suitable for him and they requested a copy of his credit file from Noddle. We didn't realise his mobile phone would be on the credit file but it makes perfect sense as he pays part airtime part device per month. The problem is because the device is on the credit file it bring his debt over £20,000 by £400.

I spoke to the insolvency service today and asked what could be done about this and although they confirmed they could not object to myself or another family member making equal payments to his debts to bring it below the threshold they did not state whether the DRO may or may not be rejected. My husband and I are unsure what to do?

If your husband meets all of the other criteria for a DRO, there is no reason that his application will be rejected if his debts are reduced to below £20,000.

He could start to pay his debts on a pro-rata basis to reduce the amount owed. A third-party such as yourself or another family member does not have to pay the debts on a pro-rata basis as your husband would. If you or someone else pays off his debts pro-rata or as a lump sum to bring the total amount below £20,000, he can go ahead with the application.

The insolvency service cannot tell you if the application will be successful as it has to be processed by an approved intermediary.

Sorry to sound stupid but what do you mean by pro rata?

Although our budget has been done as a family and although I have a credit card balance of £0 would I be able to get a money transer for £400 to bring his debt down to the £20,000?

I don't think the OR is interested in me as it's his DRO and as he can no longer work his debt is a serious problem,

Pro-rata payments are payments to creditors based on how much the debt is. The creditor which is owed the largest amount of money receives the largest share of any disposable income available to pay off debt.

It ensures that creditors are treated equally and fairly and there is no preference given to any one creditor. It is important that if your husband pays any of his debts that he does so on a pro-rata basis.

As a third-party, that does not apply to you, and you can pay off any of his debts however you choose. However, you cannot expect to be repaid any of that money, it must be a gift.

If you want to gift your husband £400 and bring his debt below £20,000 so he is eligible for a DRO, it will not cause any issues.

If you or your husband have any disposable income and have been in receipt of certain benefits for six months or more, you could consider a Budgeting Loan, which is interest free, instead of a credit card. Repayments would be deducted from your benefits each week until the loan is repaid. You would need to pay debts pro-rata if you received a budgeting loan as it would likely be a joint loan with your husband so considered to be his money and not a gift from a third-party.

https://www.gov.uk/budgeting-help-benefits

forget about DRO's for now.

List all your debts here with as much info as possible. DRO should be a final option. Stepchange are well known for giving bad advice.