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There are many advantages to entering a DRO, there are also various disadvantages – each of which must be carefully considered before making your decision. Perhaps the biggest hurdle preventing people from entering a DRO is the fact that homeowners are ineligible to apply. Therefore, if you own your own home, you cannot apply for a DRO.

 

This financial restriction goes further, with only those with very low assets able to apply for a DRO. Furthermore, applicants must have less than £50 per month in disposable income to be considered. Such restrictions also apply to the amount of debt a person must have, with a DRO only granted if your total debt is less than £20,000. Another disadvantage to a DRO is that they are only available to people living in England, Wales and Northern Ireland. Residents of Scotland are not eligible for DROs and should seek advice on what similar Debt Relief Plans are offered in Scotland.

 

Another thing to consider is that the cons of a DRO do not stop once it has ended. Whilst most DRO’s end after 1-year and allow you to then become debt free, your credit rating will be affected for a total of six-years. This means that during these six-years you will find it extremely difficult to get loans and other related financial products. There are other problems with Debt Relief Orders, one being that they only cover specific debts – this means that even if you enter a DRO, some of your debts may not be covered, therefore meaning that you will remain responsible for honouring payments for these debts.

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Yup, you may well find out that many of these debts are unenforceable, and no longer need to worry about them, and an IVA may well be unnecessary.   I was nearly in nearly 3 times as much de

There's pretty much stuff all any of those debts can do to you, if you don't own a home, apart from sell them to a DCA. As for renting another house, when you move, I went down the guarantor route for

@Andyorch This is interesting. I do not own my home, I believe the less than £50 would be about right and I guess for 6 years I wouldn't really need or want credit. As long as I can afford my rent, bills and living expenses that would be enough.

 

After 6 years does your credit score go back to a beginners rating?

Will I need to continually provide information over the 6 years of incomings or out goings?

Is this settled via a court or online process?

Will my PCP (Hire) car be taken away from me?

 

x

@Andyorch Would you say in your opinion that a DRO would be less damaging to me than an IVA?

 

Lastly, am I able to keep a debit account and debit card with a DRO?

My boyfriend is currently living with me, would his incomings affect my DRO status?

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I'm not sure to some of the above...certainly your credit file will be clean after 6 years.The rest you would have to take up with whoever deals with your DRO.

 

DRO is a small quick Bankruptcy process ...unlike an IVA which is completely different

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Hi Halpert

 

A Friend of mine went through the DRO process and came out the other side. After about a year of the DRO completing - EE Offered him a phone contract and Virgin covered him for Broadband with no issues. 

Plus now he gets a few letters through the door offering him credit cards etc with various APRs... 

 

It's only been  3 years since starting the DRO

 

Your mileage may vary... 

 

We could do with some help from you.

 

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**Fko-Filee**

Receptaculum Ignis

 

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DROs only last for 12 months ...he needs to check with his advisor

We could do with some help from you.

PLEASE HELP US TO KEEP THIS SITE RUNNING EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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  • dx100uk changed the title to 31 overwhelmed with debt and scared scotland

are any of your debt from before 2007?

 

dx

 

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please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Hey guys,

 

Thank you again for all the information. Just a side note though (not sure if it matters) the header to this topic says Scotland... but I am not from Scotland I am from Sussex, England x

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  • dx100uk changed the title to 31 overwhelmed with debt and scared

my bad got confused with kegi posting on here .

 

dx

 

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please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Thanks @Dx100uk :)

 

I don't think any of my debts go back as far as 2007 but should I contact my creditors and get the dates that the accounts opened?

 

Also, my boyfriend lives with me. Will his income affect my DRO eligibility?

 

Many Thanks x

 

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We could do with some help from you.

PLEASE HELP US TO KEEP THIS SITE RUNNING EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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upto you

you might as well include it

but to all effect and purpose there is nothing someone based in Luxemburg can do to you

they don't abide by our rules anyway having run away to avoid paying £1b's in tax in this country.

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please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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@dx100uk So they can't enforce it? That's so strange.

Ok I will include it if I go for a DRO or IVA.

 

I am reading as much as possible on both DRO and IVA's and trying to make an informed decision as to whether or not this is the right thing for me. I am struggling so much financially but I hate the thought of not being able to pay back the creditors.

 

My next question is:

Can I still send off the pro rata debt letter asking my creditors to freeze my interest whilst I look into the DRO and IVA's?

Or do I need to just go straight into a DRO/IVA situation?

 

If they freeze my interest do I then continue to pay back the minimum payments?

Or am I able to negotiate lower repayments?

Also, do I contact them myself or is there an agency I can go through?

 

I feel like I am slowly understanding the options available to me, which has eased my mind a lot.

I can't thank you all enough for taking the time to read my posts and help me out.

I have no one to turn to and you all feel like my friends now x

 

I like the idea of this: 

 

https://www.nationaldebtline.org/EW/information/10 ways to clear your debt/Pages/Options-for-dealing-with-your-debt-informal-arrangement.aspx

 

From what I can see this would not list me on any insolvency list and as such wouldn't affect my chances of getting a mortgage or credit in the future?

 

What are your views on the above? x

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pers I wouldnt touch an IVA with a barge pole.

DRO if you must take such routes

which is probably the best way for the future. as andy explained earlier

 

once you 'default' by entering into your own arrangement [our pro-rata stuff]

the defaults are there for 6yrs anyway killing credit.

but under the same breath, so is the DRO marker...

 

there is nothing to stop you doing pro rata..see how it goes

then switching if needs be.

 

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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The only reason I don't want to enter a DRO unless absolutely necessary is because I was reading that when renting your home the tenancy agent can kick you out of your home for entering into a DRO or IVA? Also, I currently rent my car on a PCP and I could have that contract terminated too?!

 

If I enter into the informal negotiations with my creditors via the pro rata letter, am I correct in thinking that this wouldn't affect my renting status and the my hire car? 

 

What would I need to show them to provide income and outgoings proof? Bank Statements and Wage Slips?

 

x

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If you have a vehicle on a HP or conditional-sale agreement and it is worth more than £1,000, payments would not be an allowable expense in your DRO. Therefore, you would have to include the debt in your application unless a third party is willing to take over the agreement for you.

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We could do with some help from you.

PLEASE HELP US TO KEEP THIS SITE RUNNING EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

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budget sheet is in the mortgage section of the library

you don't need and shouldn't have to send any proof with it.

 

 

  • Like 1

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

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Share on other sites

I don't see how it would affect your current tenancy , 

 

Do you have anyone, like parents who could guarantee any future tenancy?

 

Pers I'd ditch the car, I think it's penalty free after a certain point. Plenty of cheap reliable run arounds available for OIRO 5 or 600 quid.

 

 

 

 

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It's a PCP agreement and I think that would rule me out of a DRO as it would take me over the £20k and I don't have any third party who'd be able to take on the debt for me.

 

If I sent the letters off with the pro rata agreement, I would still be able to keep the car wouldn't I??

 

I'm thinking that although a DRO and IVA would be more immediate for me, that sending the letters off first and seeing what the creditors say and agree too may be a better and more suitable move for me x

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19 minutes ago, London1971 said:

I don't see how it would affect your current tenancy , 

 

Do you have anyone, like parents who could guarantee any future tenancy?

 

Pers I'd ditch the car, I think it's penalty free after a certain point. Plenty of cheap reliable run arounds available for OIRO 5 or 600 quid.

 

 

 

 

I don't have any parents. Which is why my main concern will always be my tenancy as I am petrified of going homeless and having no one who cares for me to help.

If I simply send off the pro rata letter though it wouldn't affect my tenancy or car would it? x

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no neither

how would they know?

 

but...defaults appearing on your credit file.. might cause problems getting a new or extending the car lease as it would require a credit check.

butIMHO the registering there of a DRO or IVA would 100% kill PCP in the future.

  • Thanks 1

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

Link to post
Share on other sites

@dx100uk That's made me think even more that the original idea of contacting the creditors myself and entering into a pro rata agreement must be my best move. I know I am in a bad financial state but I really want to reduce the restrictions for my future credit status.

 

So I now need to sit down work out my finances and how much spare money I have per month, then individually contact my creditors and ask them to freeze the interest and accept a lower monthly repayment.

 

The downsides to this are:

1. They could refuse to accept my offer (but I will only go back to the position I am in now).

2. It will affect my credit scoring (but not as bad or as long as a DRO or IVA would?)

3. The debt will not be written off but I'll just be allowed to repay it over a longer time scale and a more manageable rate.

 

The upsides are:

1. I will not have the risk of my tenancy ending or my car agreement being revoked.

2. I will be able to breathe financially and not have to worry all the time.

3. The payments I make will actually go to reducing the debt not just hitting the interest.

4. I will have a better chance or getting a mortgage in the future with this option rather than an DRO or IVA.

5. I can keep my bank account.

 

Is the above all correct?

Edited by Halpert87
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D1.tough you send letter two... no change in your overall situation.

d3..but you could change things later.

 

u1 you might have issues eitherway with the car upon renewal.

u4.possibly

  • Thanks 1

please don't hit Quote...just type we know what we said earlier..

DCA's view debtors as suckers, marks and mugs

NO DCA has ANY legal powers whatsoever on ANY debt no matter what it's Type

and they

are NOT and can NEVER  be BAILIFFS. even if a debt has been to court..

If everyone stopped blindly paying DCA's Tomorrow, their industry would collapse overnight... 

Link to post
Share on other sites

As an aside, when it comes to PCP's or monthly payments on cars there are nearly always options, no matter what your credit. Bear in mind you don't have any CCJ's either.   However the payments will be more expensive.

 

The same goes for mortgages, defaults become less important as they age, also having a higher deposit can compensate for a multitude of sins. 

 

All the above is my own personal experience, it's never the end of the world.

Edited by London1971
  • Like 2

We could do with some help from you.

PLEASE HELP US TO KEEP THIS SITE RUNNING EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

 Have we helped you ...?         Please Donate button to the Consumer Action Group

 

If you want advice on your thread please PM me a link to your thread

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