donuticus Posted December 30, 2011 Share Posted December 30, 2011 If you're over £15k in debt & can't pay it then you can go bankrupt. DROs are for people who don't owe enough to be able to go bankrupt. Then surely they should be expected to pay it back to the people/companies they owe it too? Link to comment Share on other sites More sharing options...
medusa Posted December 30, 2011 Share Posted December 30, 2011 I think that it's likely that many people who opt to go for a DRO are unaware of quite how much of an impact this sort of thing is likely to have on their long term credit rating, and by the time they find this out the damage is already done. It would do them much more favours to get some proper debt counselling and go with a repayment plan organised by one of the big debt charities rather than a DRO. I know that this would take a lot longer to pay people off and would involve a long spell of planning finances to live to a budget and the like, but actually this is good for you if you're used to spending and worrying about paying it off later. It's taken 11 years to pay off the debts that my ex-husband so very kindly incurred in joint names (and then skipped the country) but I would much rather look back on this and know that I have paid every penny back than have the long term financial issues from making the decision to accept bankruptcy. I also wanted a solution that didn't involve selling my house and not being able to buy again, which is what most people who have been declared bankrupt or had a DRO are likely to find, especially now the banks are applying more strict rules to mortgage applications. Link to comment Share on other sites More sharing options...
anywebsite Posted December 30, 2011 Share Posted December 30, 2011 Then surely they should be expected to pay it back to the people/companies they owe it too? Unfortunately some people get themselves into unmanageable debts. It's not always all their fault either, they could lose their job, develop a serious illness or disability, or have other unexpected changes to their financial circumstances. Then the debts can spiral out of control through interest rate hikes & missed payment penalties. Which means they can owe much more than they originally borrowed. So, if somebody simply doesn't have the money to pay, then what should happen? Bankruptcy isn't an easy way out. It's not like other people have suggested, as if you can go out & get a new sofa on credit then decide to just go bankrupt to avoid paying, without any consequences. DROs fill the gap for people that find less than £15,000 of debt unmanageable. Link to comment Share on other sites More sharing options...
Stranza Posted December 30, 2011 Author Share Posted December 30, 2011 It seems that DRO's are being used as just that, an easy answer to erase 15k of unsecured debt. And from the stats that are being quoted in the news reports the people using them are not people who have managed themselves carefully for years only for redundancy/illness etc to upset the apple cart and then they found they couldn't manage. The DRO's are favoured by 20-25 yr old debtors who have no 'assets' to show for these debts and the study is showing the main culprit to be credit/store card debt. I feel for anyone who is unfortunate enough to be forced bankrupt and agree that it isn't something that's done lightly what I don't agree with is this easy answer (you don't even have to attend court you go to the CAB have a debt advice session and then they apply for you online) DRO it somehow feels like it's normalising writing debt off instead of encouraging people not to take on debt they can't afford to pay back. I've had debt myself when I was forced to quit work due to illness I didn't quit my overdraft at the same time so it soon mounted up and at the end of each month my sick pay didn't cover it so eventually I took a loan out and lived on credit cards etc when I realised I was going to have to tighten my belt I didn't decide to shaft all the companies that had lent money to me, it was me spending it not them! I stopped living outside my means and ok I don't have the best mobile phone and my car hates all weathers and only works on a Tuesday BUT they are the best I can afford so they are what we have. There is such an 'entitled to' attitude now that it's seen as cruelty to not have broadband for the kids or sky TV. The talk of raising the limit on these is just more pandering and more 'it's not your fault' where will it end? The banks already are stricter on lending and when we are all forced to pay silly interest to high rate loan companies because they are covering the risk of these soft bankruptcy options the people who do their best and try and live by what they have will suffer. Link to comment Share on other sites More sharing options...
Twiglet Posted December 30, 2011 Share Posted December 30, 2011 Lots of people coming out of uni have far far more than £15k student debt nowadays. Your talking about £25-40k, soon to be £40-60k. (Although that's paid back through the PAYE system in the form of a graduate tax, a tax on the youth to benefit boomers one should consider it) People take out X00k mortgages. Many people have credit cards and use them willy nilly. Often these people are one and the same, they might have student debt, mortgages and a credit card. Living way beyond their means. Student debt does not qualify for DROs or bankruptcy. Students coming out of university are unlikely to get mortgages for decades until they save deposits at the level now required. Link to comment Share on other sites More sharing options...
chem1st Posted December 30, 2011 Share Posted December 30, 2011 Student debt does not qualify for DROs or bankruptcy. Students coming out of university are unlikely to get mortgages for decades until they save deposits at the level now required. They can still get self certs without proof of income can't they? Link to comment Share on other sites More sharing options...
Twiglet Posted December 30, 2011 Share Posted December 30, 2011 They can still get self certs without proof of income can't they? On a few mortgages; but the deposit requirement is even higher. Link to comment Share on other sites More sharing options...
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