What happens if I get a lump sum of money during the next 12 months?
As good as a lump sum of cash might affect your DRO application. If you do receive one you'll have to let the Insolvency Service know about it.
Lump sums will normally come from:
- An inheritance
- Winning the lottery (you never know!)
- Compensation from an accident
- Backdated benefit payments
- PPI reclaims (this is why you shouldn't start any PPI claims during your 12 month moratorium period).
If you receive a lump sum or an asset during your moratorium period your DRO won't automatically be revoked (cancelled) as long as:
- It's worth less than 50% of the total amount of debt you owe
- You tell the Insolvency Service DRO Team within 14 days of receiving it. If they find out this information from someone else they'll revoke your DRO.
As long as you tell the DRO Team at the Insolvency Service about your lump sum they'll follow these principles:
- If it's worth less than £705 your DRO won't be revoked
- If it's worth between £705 and £1,849 the DRO Team will make a decision based on your personal circumstances
- If it's worth more than £1,850 your DRO will be revoked