Debt Advice - DRO?

Hi CJ1974,

I did a similar thing back in 2010 where I freezed the interest. I got a black mark anyways on my report and had to wait 6 years for it to get any better. 

I would see if anyone has any good advice on this one as I have never done one of those before. But from a gamblers point of view the less access to credit the better for me is what I have found in my recovery. But not to say it might not come in useful one day. It's definitely a personal choice and best to get different opinions.

Take care 

Dave101

Hi there. 

look into other debt solutions before you commit to a DRO. I’m currently 3 of 5 years into an IVA in which I pay an affordable amount back every month to my creditors. From what I remember when I was exploring solutions a debt relief order never leaves your record it will always be there. Which is fine if you never want credit again or a mortgage. You may still get these things in later life but with massive APR rates. An IVA (Individual Voluntary Arrangement) allows you to repay what you can afford over a maximum of 5 years, freezes all interest and charges on your accounts, anything you can’t afford to pay back is written off, and from the 6th year, a year after you’ve successfully completed it is completely removed from your record. 

I am confident a DRO is a black mark forever because from what I remember you pay a one off fee of like £50 isn’t it?, and everything else goes away. The reason I didn’t go for it 3 years ago was because I didn’t want that black mark there forever. 

Do a bit of research on all the options before you settle on what’s right for you. 

C

Posted by: @cj1974

Hi there.

I recently spoke to Citizen's Advice about substantial debt caused by a long-term gambling addiction, He suggested a Debt Relief Order would be a good option to wipe the slate clean as it's unlikely I will ever pay this debt off and it currently just sits there. Any advice if this would be a good idea as a clean start? I realise my credit rating would be ruined for 6 years but it is already ruined.  I've recently secured really good low-rent social housing after being made homeless so no need for a credit rating for a mortgage etc, although I would eventually love to buy my own place. Any advice is gratefully received.

It's understandable that you're looking for a fresh start to get your finances back on track after struggling with a long-term gambling addiction. A Debt Relief Order (DRO) may be a good option for you to consider, but it's important to fully understand the implications and make an informed decision.

A DRO is a form of insolvency that allows you to write off qualifying debts of up to £20,000, with no repayments needed. It's designed for people who have little or no spare income, few assets, and no realistic prospect of paying off their debts in the foreseeable future. You can apply for a DRO through an approved intermediary, such as Citizens Advice.

Some factors to consider before applying for a DRO include:

• Eligibility: You must meet certain criteria to be eligible for a DRO, such as having debts of £20,000 or less, not owning your own home, and having less than £50 a month left over after paying your essential living expenses.

• Consequences: While a DRO can offer a fresh start, it will also have implications for your credit rating, bank account, and ability to borrow money in the future. Your name and details will also be added to the Insolvency Register, which is a public record. It's important to weigh up these consequences before making a decision.

• Alternatives: A DRO may not be the only solution to your debt problems. You could also consider other debt solutions such as a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), or bankruptcy. Each has its own advantages and disadvantages, so it's worth seeking professional advice to explore your options.

It's great to hear that you've secured low-rent social housing, and it's true that a good credit rating may not be essential for you at this stage. However, it's worth bearing in mind that a DRO will affect your ability to access credit in the future, which could impact your ability to buy your own home further down the line.