Sarah arrived for her appointment at our office anxious and distressed. She had received a letter threatening committal to prison following a failure to provide information to the court. She is a single parent of three children, working part time and claiming benefits.
We gave her the option of a Debt Relief Order (DRO). She has no assets, a shortfall of around £180-a-month and debts of around £10,000. She was struggling to cover her priority commitments like rent and council tax so a payment plan was never going to work.
We first addressed the shortfall because there is little point in dealing with the debts if the client cannot manage her priority commitments. We checked the benefit entitlement and discovered Sarah’s Housing Benefit award was incorrect because they were only paying for two children. Once this was rectified, the Housing Benefit award increased by around £50-a-week. No backdated amount was due because the error lay with the client.
We called the court and explained what we were doing. They put the account on hold and asked for a copy of the debtors notice to be emailed to them. They confirmed no further action would be taken if the DRO goes through.
We managed to obtain a copy of Sarah’s credit report online and she used her food money to pay the DRO fee. We gave the client a food bank voucher to cover this loss. The DRO was submitted and approved the next day.
The end result was an increase in income by £50-a-week which meant Sarah was able to afford to live and provide for her family. She was also left completely debt free which improved her anxiety to a point that she felt able to increase her hours slightly at work and dedicate more time to her family and social life.