When applying for a Debt Relief Order (DRO), this could affect your partner in many ways. This article answers the question: Will a DRO affect my partner?
You may also want to read our article on how a DRO affects married couples.
Can I get a DRO if my partner is working?
An application for a DRO is about your personal situation and is not based on somebody else’s ability to pay towards your debts. Looking at your details it will show income from benefits and tax credits and then you pay your share of the household bills and your own personal living costs, your partner will pay their share of the household bills and their own living costs.
If you meet the criteria for having less than £50 a month left over then a DRO may be possible. The best way to find out how this may work for you is to speak to a free debt adviser and give them all of the information about the household and they will be able to work through it and let you know.
There may be other things that need considering before going ahead; if your bank account is a debt of the Order then you may need to open a new account with a brand that you don’t owe any money to.
Will my partner’s income be included in my DRO?
As a general rule of thumb, only your income will be taken into consideration when you apply for a DRO. However, your partner may be making a contribution to the household and this could be classed in the DRO as your income which can then be offset against the rent and council tax.
You must notify changes of financial circumstances and your DRO will be re-evaluated. So the answer really depends on whether those changes result in a failure to meet any of the DRO criteria.
If you are both living together and this results in changes to income and expenditure then it may mean that you now have over £50 a month left over, or it could mean that you are worse off than before. It would be reasonable for someone to contribute to the household that they are moving into and this could mean that income increases. However at the same time, this may result in benefits being decreased, household costs increasing so it is not really possible to say here what the results of the changes will be.
Someone would need to look at all of the facts and figures about your case so you could contact the intermediary who submitted your application. They should be able to confirm what is likely to happen and also advise on how you can proceed to deal with your debt if the DRO is revoked.
Can I apply for a DRO if my partner has arrears on a mortgage?
If you are not named on the mortgage or the deeds of the property there should be no reason why you cannot go through a DRO as long as you meet the qualifying criteria. However, please be mindful that the arrears on the mortgage would remain outstanding, as this would not be considered one of your debts.
Remember, if you do not own, or have any interest, in an asset worth more than £300 then you would satisfy one of the criteria for a DRO.
Will my partner moving in with me affect my DRO?
If you really have no income at all and you were living off benefits, but now your partner is willing to pay everything, you should be able to stop claiming benefits and still have no surplus, so you’ll be fine. The DRO would probably be revoked if you started to have more than £50 per month spare cash.
Is money owed to my partner included as a debt in a DRO?
With regards to going through a DRO, you need to list all your debts on your application. The money owed to your partner will be seen as debt and as such should be listed on your application. Passing money to your partner could be interpreted as either showing preference to one creditor over another or disposing of an asset. This would mean the DRO unit could reject your application for a DRO. As a consequence of this, you will then be forced to go bankrupt as a means of clearing your debts and a large portion of your tax rebate will be required for the bankruptcy fees.
If may be better for you to distribute your tax rebate between all of your creditors (including your partner) on a pro-rata basis (ie the largest proportion of the tax rebate to your largest creditor on a percentage basis). By doing this you will not be showing any creditor preference and you should be able to do a DRO.