Low income debts – a new solution
There is little that is more ominous than bankruptcy. With the threat of it looming over your head, there seems little else to focus on. It clouds your thoughts, affecting your life at home and at work. It is a subject with a stigma attached to it, with people embarrassed about confronting the issue and avoiding seeking help.
It may seem like an obvious observation, but you would be surprised how much it costs to declare yourself bankrupt. It must be stressed that all other paths must be considered before you take the route of bankruptcy, as it is not a quick fix to your problems. While all is not lost should you do so, it will still take years of careful financial management to recover. This is where the new solution comes in.
Debt Recovery Orders, or DROs, are becoming increasingly popular across the country as many people find themselves struggling with various debts. A newspaper in Lincolnshire has highlighted the growing number of cases that are being reported in their community. The report can be seen as a microcosm of the entire country.
For just £90 many people have been able to sidestep their looming bankruptcy by purchasing a DRO. Seen very much as the last chance saloon for debtors, a DRO is a very quick solution to serious financial problems. As long as the debt does not exceed £15,000 and providing other stipulations are met – these will depend on the specific of your case – your creditors have to receive permission from the court if they want to contact you. Within a year, you could see your debt written off.
Authorities in Lincolnshire recorded ten DROs that were issued in just a month. The reason for this, they believe, is that bankruptcy is too expensive. A DRO can be attained for a much smaller fee and there are a lot fewer legal hoops you have to jump through in order for it to be actioned.
Introduced in 2009, it is surprising that they have not received much attention in the press. For people on low incomes who find themselves in difficult financial situations they are an ideal way to get back to a more secure position. Without any expendable income or any assets to gain funds from, the courts are able to issue a DRO which effectively exempts you from further action from the creditors.
With all forms of debt relief, however, there are other implications. A DRO will still have a detrimental effect on your credit rating. They must still be treated with caution and cannot be seen as an easy get out clause for smaller debts. However, if you are on a low income and feel threatened by bankruptcy then they are definitely worth considering. Our detailed guide on DROs will help you decide whether they are the right course of action to take. If you still have further questions, do not hesitate to contact CTA today for expert advice on all forms of financial difficulty.