Does getting a Debt Relief Order (DRO) affect your employment? This article explains everything you need to know about getting a DRO and employment.
How does a DRO affect my employment?
A DRO can affect your employment depending on your situation. You would need to ask your employer about the terms of your contract of employment or go through the details with ACAS if you need any help with employment rights.
If you have any professional memberships or licences, then you may need to check whether this causes any difficulty. The approved intermediary, who is putting together your case details, should be able to highlight any further considerations in relation to your circumstances. If a DRO is not possible then there may be other options available to you.
As a general rule of thumb, DROs are the same as bankruptcy with regards to the restrictions placed on the debtor and the impact they have. A DRO has the same implications as bankruptcy when it comes to working with the navy, as an example.
Please note, A DRO will show on the Individual Insolvency Register and will therefore also show up on your credit reference agency files. Whether this is something that your employer checks regularly, or whether you are required to notify, will also be shown in the terms of your employment.
My employer is increasing my pay, will this affect my DRO?
It is unlikely that this change will result in your DRO being revoked. However, you are duty-bound to declare any increase in income to the Official Receiver.
I am unemployed, how will I pay for a DRO?
Whilst you are unemployed it is highly unlikely that you have anything at all left over at the end of the month to pay towards debts and a new financial statement should be forwarded to your creditors to show the change to your circumstances. Lowering the payment to £0 or maybe £1 to each creditor is possible when necessary. Some people prefer to offer a token payment to each creditor but this really depends on how many debts you have, a few token payments can quickly add up and become impossible to achieve.
Your creditors do understand that unemployment can completely remove the ability to pay towards debts. This is often a temporary situation followed by employment and an increase in monthly payments.
If you are currently using one of the free providers please contact them and update your income and expenditure details. If you are with a commercial debt management provider they may not be able to assist with this. This is because there is not enough money to pay into the plan to cover their fees. Call one of the free providers. They will be able to provide the same service as the fee charging companies. When you are back in work you will have the benefit of paying towards your debts. Instead of being lost to fees.