DRO or token payments?

[Laurendo]

Hi there

 

I am a 23 year old student with around £10,500 debt, not including student loans.

I spoke to a Stepchange debt advisor who said that I am eligible for a DRO but that she wouldn't recommend it due to my age,

as getting credit for the next 6 years would be impossible and as I graduate in a few months and may then get a job, it could end up revoked.

I saw her point and I agreed.

She suggested instead to make token payment of £1 a month until my circumstances change, t

hen set up a debt relief plan with them once I am earning.

Over the course of the phone call I thought this all sounded good, and I left happy.

 

Now I'm not so sure.

It's so tempting having my debts wiped, and my credit will surely be a mess if I go this route too?

But at the same time if it is revoked that'd be frustrating.

I'm thinking maybe I could work part time or a lower paid job for the 7 months following graduation,

get the year over with and then start life debt free...?

 

will my credit be just as affected down this route?

 

Writing all this down a DRO seems a big responsibility after all - and if I do end up earning more I might be even more of a mess.

 

I'm not sure what to do... thoughts appreciated! Sorry for the umming and arring post!

 

Thanks

[dx100uk]

can you list your debts and whom they are with please

 

dx

[cerberusalert]

A DRO only lasts for a year so by the time you graduate & get a job you will probably have been discharged so it should have no effect. Also your credit file will already have been damaged for six years in any case so a DRO wouldn't have that much impact on it.

[Laurendo]

Hi there,

 

Thanks for the replies. My post is hard to read - not sure how it ended up so spread out!

 

I owe the following:

 

MINT: 1500

Orange credit card: 1000

Barclaycard: 4500

Lloyds TSB credit card: 750

Lloyds TSB overdraft: 1500

Provident: 400

University loan (cash loan direct from uni): 400

Wonga.com (I know I know): 400

 

The nature of my degree (social work) means I am likely to get a job soon after graduating - around August. I'm thinking I could work part time or an unqualified role until December/January, which if I got a DRO now would mean I was discharged before I earnt a decent amount.

 

But I'm not so sure about this if my credit rating ends up a total mess for 6 years

- of course as cerberusalert said making token payments would also mess it up for 6 years,

so maybe it's worth it to get rid entirely?

 

The stepchange advisors point was that a tenancy or a mortgage etc would be impossible for the next 6 years if I got a DRO

- but surely this would be the case even if I just make token payments?

 

Plus I'm thinking that in the future any tenancies etc will be with my partner,

whose father will guarantor us if necessary (I'm not being too naive, I've been with my partner almost 6 years) so it wouldn't necessarily be a problem.

 

What would you do in this situation?

[dx100uk]

for the debts you have

 

i would not pers go with a dro.

 

MINT: 1500

Orange credit card: 1000

Barclaycard: 4500

Lloyds TSB credit card: 750

Lloyds TSB overdraft: 1500

Provident: 400

University loan (cash loan direct from uni): 400

Wonga.com (I know I know): 400

 

pers i would do the following:

 

your objective here is to get them to accept your offer

but..

.

you TELL [dont ask] them they are only going to get £xxPCM for xx mts as a goodwill gesture

and as a reciprocal GOGW they must freeze int & refrain from levying PENALTY charges.

.

if they wont,

you will drop them to £1PCM for life.

.

as an EXAMPLE>

.dear fleecer

I am currently in financial difficulties and not able to meet my normal monthly repayments.

to show my goodwill, i am going to pay £5 for 6 mts.

.

.

i will update you in 6mts time or before, should my situation change.

.

could you please as a reciprocal goodwill guesture,

.

refrain from levying any penalty charges & freeze the interest on my account.?

.

Should you fail to assist me during a period of financial difficulty, contrary to all the guidelines and codes

issued by the relevent bodies and authorities that govern you and the way you conduct yourselves.

.

i shall have no alternative but to reduce my offer to £1PCM for the rest of the life of the account,

.

.

as your actions would do nothing to help me.

.

i thank you for your time.

..

.The OFT has stated 'it is abasic principle that creditors cannot refuse to

 

accept payments from adebtor. If we receive evidence of a creditor

 

operating a deliberatepolicy of refusing to accept debtor created

 

repayments plans to thepoint where it is causing more detriment we may view

 

this as an unfair businesspractice'

 

 

dx

.

then pay by your internet banking site

.

and get reclaiming

.

TAKE CONTROL

.

or

if you have sent the above and they refuse

then as an EXAMPLE write back........

.

.

i'm sorry, but you have failed to assist me during a period of financial difficulty, against all the guidelines and codes

issued by the relevent bodies and authorities that govern you and the way you conduct yourselves.

i repeat again, the contents of my letter dated dd/mm/yyyy, for want of clarification:

to show my goodwill, i am going to pay £XX for XX mts

could you please as a reciprocal goodwill guesture, refrain from levying any penalty charges & freeze the interest on my account.

.

i will update you in 6mts time or before, should my situation chance.

.

should you fail to help by refraining from levying unlawful PENALTY charges & freeze my interest,

i shall have no alternative but to reduce my offer to £1PCM for the rest of the life of the account,

as your actions are doing nothing to help me.

This is contrary to the rules you should operate under.##The OFT has stated 'it is abasic principle that creditors cannot refuse to

 

accept payments from adebtor. If we receive evidence of a creditor

 

operating a deliberatepolicy of refusing to accept debtor created

 

repayments plans to thepoint where it is causing more detriment we may view

 

this as an unfair businesspractice'

 

 

 

disgruntled account holder

dx

[Laurendo]

Can I ask why you would personally not go for a DRO?

 

Thanks

[dx100uk]

too young

 

lots of your debts are short term

 

MINT: 1500 charges/ppi

orange credit card: 1000 charges / ppi

Barclaycard: 4500 charges / ppi

Lloyds TSB credit card: 750 charges/ppi

Lloyds TSB overdraft: 1500 charges/ppi?

Provident: 400 [doorstepper high int]#

University loan (cash loan direct from uni): 400 - going

Wonga.com (I know I know): 400 short term

[Laurendo]

So I wrote to all of them offering £1 a month. So far Mint and Orange have replied, agreeing to the payment amount (Mint for 6 months) and freezing interested and charges. Good start!

 

However Orange have warned that as I am not on a formal reduced payment plan they will eventually refer me to their recoveries departments. They said if I paid £4.84 a month they would consider that a formal arrangement? Is this worth doing it, or shall I pay £1 a month until they moan, then increase it to £4.84?