Posts
The UK Government's most recent proposition for dealing with debt looks to be nothing more than dead duck. I would surmise that this is a badly constructed plan, badly executed, which will bring very little benefit to very few people.
The concept for debt relief orders is really a lighter version of the more formal versions of debt management (IVA's and bankruptcy). This is not enacted by the courts but by the insolvency service.
The main issue is that the profile of a person who qualifies for debt relief order is so narrow that very few people would qualify for it. One friend within the industry stated that 'Only a tramp would qualify for a Debt Relief Order' and also that 'The range of organisations which can offer a Debt Relief Order is so limited that obtaining one may be very difficult.'
To be eligible for a Debt Relief Order, you need to meet four criteria which are: The inability to pay your debt, have less than 50 per month of disposable income, have less than 15,000 pounds of debt, and have assets of less than 300.
Needing to have assets of less than 300, (which is about the equivalent of a good CD collection), would eliminate over 95% of the UK population. The combination of the other criteria would put that figure over 99.95%. So the UK government has created a scheme which nobody qualifies for, which will benefit no one, and bring no tangible result.
Parliament in its wisdom has appointed just six organisations to be able to supply DROs, five of which are charitable, and one which is a commercial debt management company. How do they justify this? Is not parliament creating a monopoly due to public regulation? Is this really in the interest of fair and open debt management market?
A commercial debt management company will never make a substantial profit from completing a DRO, it is certain most clients applying for a Debt Relief Order will not qualify and Baines and Ernst will be able to sell them an IVA, Debt Management Plans, or Bankruptcy services.
Again we see not only the UK government acting in an inefficient and wasteful manner, but in a way that seems commercially prejudiced, corrupt, and looking after the interests of one company within the debt arena.
The concept for debt relief orders is really a lighter version of the more formal versions of debt management (IVA's and bankruptcy). This is not enacted by the courts but by the insolvency service.
The main issue is that the profile of a person who qualifies for debt relief order is so narrow that very few people would qualify for it. One friend within the industry stated that 'Only a tramp would qualify for a Debt Relief Order' and also that 'The range of organisations which can offer a Debt Relief Order is so limited that obtaining one may be very difficult.'
To be eligible for a Debt Relief Order, you need to meet four criteria which are: The inability to pay your debt, have less than 50 per month of disposable income, have less than 15,000 pounds of debt, and have assets of less than 300.
Needing to have assets of less than 300, (which is about the equivalent of a good CD collection), would eliminate over 95% of the UK population. The combination of the other criteria would put that figure over 99.95%. So the UK government has created a scheme which nobody qualifies for, which will benefit no one, and bring no tangible result.
Parliament in its wisdom has appointed just six organisations to be able to supply DROs, five of which are charitable, and one which is a commercial debt management company. How do they justify this? Is not parliament creating a monopoly due to public regulation? Is this really in the interest of fair and open debt management market?
A commercial debt management company will never make a substantial profit from completing a DRO, it is certain most clients applying for a Debt Relief Order will not qualify and Baines and Ernst will be able to sell them an IVA, Debt Management Plans, or Bankruptcy services.
Again we see not only the UK government acting in an inefficient and wasteful manner, but in a way that seems commercially prejudiced, corrupt, and looking after the interests of one company within the debt arena.
About the Author:
Debt Relief Orders may not be for you but we have debt management options which will be right for your requirements
No comments:
Post a Comment