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Exactly what is a DRO?

The DRO was introduced to help the least complicated debt cases be discharged on a fast-track through the court system with no personal appearance at court required. Happily, from next year, the standard consumer bankruptcy will no longer need to be going there either.

A DRO is designed to provide a fresh start for the most vulnerable people trapped in debt. Currently however, because of the ridiculously low qualifying criteria set some 10 years ago where a debtor’s unsecured debts are below £15,000, disposable income is less than £50 per month, they are NOT a house owner, even in negative equity and assets are valued less than £300!!!, it is only really appropriate for the unemployed, those unable to work and on long term benefits.

Come on, get real, most people will have assets easily over the £300 threshold. A newish mobile phone, which everyone seems to have now no matter what their income or level of debt, can be worth at least £100 on trade-in.

Read more: So at last the government are to review Debt Relief Orders (DROs)!


Is it so surprising that bankruptcy numbers are down again? Is it because fewer people are running into trouble?

In my book the answer to both questions is no.

Research from Citizens Advice shows that nearly half of those for whom bankruptcy is the only option are simply too poor and do not have the money to pursue it.

The cost for the government when someone goes bankrupt

Read more: Should the tax man or creditors help those who can’t afford bankruptcy fees?


Previous research by Shelter threw up a shocking statistic; one million householders, representing 6% of all the homes in the UK, and one in 12 Londoners, have used their credit cards to pay their mortgage, with all social groups affected, from those on low incomes to the middle class and other more affluent households.

Read more: Is it a good idea to pay the mortgage with a credit card?


It’s one thing having a debt problem but a bigger worry is family members finding out about it. Hiding debts and having to decide to go bankrupt or enter in a repayment programme with credit card providers without anyone knowing can be difficult, but should you keep it quiet?

Statistics show that nearly a third of those in debt, including children living at home with their parents, hide the true extent of debt from family members.

Read more: Will my parents find out about my debt arrangements?


Back in 2010 I reported that according to the Office of National Statistics (ONS) the country was out of recession, news which dominated the headlines at the time. We had been in recession for the longest period since quarterly figures were first recorded in 1955 and were the last major economy to come out of the world wide recession, but only on the growth of 0.1 percent.

Read more: Cash, Credit and Confidence to drive recovery


The Centre for Social Justice has just reported for the Conservatives on how much debt UK consumers have and how the poorest families need help the most. My concern is will this government actually listen and act on this report? I don't know if they will based upon past experience.

Just after they came to power the coalition increased the cost to go bankrupt for consumers in Eng & Wales by 40%, this means the fees are now £700 per person as against £200 in Scotland. Does this help a consumer that has no other option other than to go bankrupt?

Read more: People in debt need more affordable debt solutions


I am well aware of some people’s views on consumers who are in financial difficulty. “It’s their own fault, they could have said no and they are responsible for their own demise”

It’s worth bearing in mind that very few people run up debts with the sole intention of not repaying them and for the average consumer their fall is usually a result of an unexpected trigger such as a relationship breakdown, illness, an unexpected job loss or a similar life-changing experience.

Read more: Paul Bhattacharjee killed himself after being declared bankrupt - BBC News


The latest figures just issued by The Council of Mortgage Lenders (CML) show that the number of homes repossessed during third quarter stands at 7,200. This figure, the lowest since since quarterly data began and is clearly helped by low interest rates which look to stay that way for a while yet. Good job too as this helps mortgage payers cope with otherwise hefty repayments and stay on top of their bills!

Read more: Latest Home repo stats



DebtWizard will be participating in the forthcoming FCA consultation on reforming the debt management sector and although pleased to see more stringent regulation for the Payday lenders in the offing would like to see a cap on interest rates and additional charges and the removal of the Continuous Payment Authority (CPA), something popular with gym memberships. Such payments should be made instead via the direct debit (DD) route but it is obvious why they are popular with Payday lenders as they know that most borrowers would struggle to meet the required DD monthly payments, I rest my case.

Read more: The cost of bad debt advice - Roll on April 2014



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