Debt relief order help

A question about : Debt relief order help

hi people,
new to the forum so ill start by saying hi
hope someone can help
im going under a DRO this week but have just been informed that i will be receiving compensation from an injury claim that has been going on years - bad timing eh!!
my question is , i have included all my official debts within the debt releif order but i still owe a lot of money to family.
i am due Ј5400 from my injury claim, i have no bank account so was going to use the money shop to cash it (i know ill lose a fair bit but needs must).

i know i have to report it to the official receiver which i plan to do but i was wondering if anyone knew if i used this money to pay off my debts to family,which wouldnt leave me a lot of the payout left, would the official receiver cancel my dro?

i know its a bit of a complex situation but citizens advice seem to think i will not even see the money,it will go straight to the insolvency service,even though the solicitors will be likely to send it direct to me. either way as long as i can be debt free in 12 months im happy,id just like to know the process/result

thanks in advance

Best answers:

• Doesn't PI claims get shown against national insurance numbers these days
• How will the insolvency service know ive received this payment? Unfortunately the application was finalised yesterday and id rather carry on with it than stop as i have court bailiffs on my case
  .do they record it against my nationl insurance or would the IS have any record of the payment made to me.or just take my word on it reporting it?
  Im on other benefits too while I sort myself out so there is zero chance of me.hidingany of the the money
  Its a little confusing to be honest
  Im thinking im just going to have to hand it over.3years of fighting for compensationand 2 perforated discs and looks like im just going to lose it all :/
• Just to note it was cab I went through and was told I couldnt include family debts as they werent on my credit files
• When you say 'the application was finalised yesterday' that may not be the same as 'the application was submitted yesterday' Even if it was submitted it may not be too late if you act quickly to stop it. Your DRO cannot survive you getting a lump sum of Ј5400, and it is likely to be discovered even if you tried to hide it (which to your credit you are not trying to do), so your DRO will be revoked.
  The difference is that if the application is stopped now, it could possibly be made again later but if the DRO is revoked you cannot have another one for 6 years.
  You will not be forced to do anything with the money. DROs are for those without assets so getting a lump sum (there's some discretion for small assets but I think this ends at Ј1750) in the 12 month DRO period just means that the dro fails and your debts come back.
  If you stopped the application, then you could pay the lump sum pro-rata to your debts and would still qualify for a DRO if there were still debts remaining and your assets under Ј300, as you will have treated all creditors equally.
  However, the lump sum is yours, you do not 'have to hand it over' and you can deal with the debts as you wish, particularly if the dro route becomes closed to you. You will be paying the court-related debts in full (if these are magistrate court fines they are excluded debts in DROs anyway) and will probably want to settle the family debts likewise but the other debts may be open to settle at a percentage. It's just that on a dro application there is a question 'have you preferred one creditor over another in the past 2 years'
• Unlike other forms of insolvency where any payout for pain and suffering is basically exempt and loss of earnings is an asset/windfall, under a DRO the whole lot is an asset, so the DRO is a no go unless you want to take the chance of not declaring that you have received the payment, which isn't a risk I would take personally.
• Hi Bimmerboy
  Quote:
• ok brilliant this seems to have cleared this up a lot, the official receiver filed it on the insolvency register today so im now officially under a DRO.
  the claim is 100% damages as the insurers have refused to pay out for loss of earnings and any losses incurred. I will wait until i physically have the cheque and will contact the IS as to what is my best option for it.
  it wont pay all of my debts off but it may go a good way to clearing most of them.
  a big big thankyou to all who have contributed to my post
• I have to disagree with National Debtline.
  The DRO Unit have confirmed that it IS an asset (I spoke to them yesterday on this very subject for clarification as I believed also that pain and suffering compensation was likely to be exempt), whilst under other forms of Insolvency, e.g. IVA or Bankruptcy, then personal injury damages/compensation are NOT considered an asset/windfall.
  The easiest thing to do, and I understand that conflicting advice isn't usually a good thing, is to talk to the DRO Unit yourself. You can do this, anonymously, by calling 01752 635 200, press option 2 and option 2 again. Certainly, though, this payout needs declaring.
• i have spoken with them today and they have advised me although it needs to be declared it it is not classed as an asset.
  what they have said is that it may be seen as my financial situation has improved and my dro can be revoked due to this.
  anyway , on the upside (kindof), my claim is now going to court so is very likely to not be paid out until my dro 1 year period is over