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Impending Bankruptcy!... Too late to get a Debt Relief Order?


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I have a council tax debt from about 5 years ago (been chasing me for years and I just ignore them) now the council have written saying they are petitioning for my bankruptcy (about a month ago).

 

I own them about £2,000.

 

I also have other unsecured debts totaling about £7,000 altogether (housing benefit overpayment, credit cards, utility bills).

 

I have no income other than Job Seekers Allowance and Housing Benefit.

 

I have no assets other than clothes and ordinary household items (like a DVD player and clothes).

 

I'm worried this 'bankruptcy petition' could arrive any day, I've just been looking up my options and discovered the Debt Relief Order (DRO) and it likes like I might be eligible, I have no idea what to do

 

If I inform my creditors I am applying for DRO will it slow them down until it's gone through?

 

Please HELP!

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If a creditor is petitioning for your bankruptcy, let them do it, as the effect on you will be the same as if you apply for a DRO.

 

By a creditor petitioning you will not be liable for any costs, whereas by applying for a DRO you will have to pay £90.00...

 

As you say you have no assets so why worry about being declared bankrupt

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As you say you have no assets so why worry about being declared bankrupt

 

Surely a DRO is less severe than bankruptcy? Are they one and the same? The £90 fee seems worth it if they are different.

 

There are two reasons I personally would rather not go bankrupt:

 

1. I am involved in politics and would like to stand as a candidate in the local elections (I've stood in the general elections in the past).

 

2. I am a board member (unpaid) of a charity and would like to remain involved.

 

I know after 12 months under bankrupcty I could apply to be discharged and these two issues would not be a problem, but it would be best avoided don't you think?

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It is best avoided, yes, and for the reasons you point out above I can understand it.

 

A DRO is like a "lite" version of bankruptcy, designed for those with debts of under 15k and unable to afford the bankruptcy fees due to being on low incomes. I'm not 100% sure whether a DRO affects your ability to stand as an MP or board member in the same way; speak to the CAB or CCCS re this.

 

If you are applying for a DRO, request a copy of your Experian credit file and statements from all of your creditors now as your intermediary will require these to process your DRO, this also makes sure the balances you quote are correct; quoting an incorrect figure for your DRO can be a nightmare to sort out as creditors are only obliged to write-off any amount quoted to them by the Official Receiver.

 

With regards to discharge, I am now seeing bankruptcy cases where there are no assets and the debtor is being discharged within 6 months, so if you can't get the action delayed by your creditors, it's not the end of the world perhaps.

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Surely a DRO is less severe than bankruptcy? Are they one and the same? The £90 fee seems worth it if they are different.

 

There are two reasons I personally would rather not go bankrupt:

 

1. I am involved in politics and would like to stand as a candidate in the local elections (I've stood in the general elections in the past).

 

2. I am a board member (unpaid) of a charity and would like to remain involved.

 

I know after 12 months under bankrupcty I could apply to be discharged and these two issues would not be a problem, but it would be best avoided don't you think?

 

Hi there, I honestly think that, from an implication perspective, that DRO's and Bankruptcy are pretty similar as far as their severity is concerned. I'm sorry to say that if you wish to continue being a board member for the charity then both options are a no-no.

 

For the record, unless you have a significant asset I'll be surprised if the council petitions for your bankruptcy.

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