Debt Relief Order

What is a Debt Relief order?

A debt relief order (DRO) is one way to deal with your debts if you:

Owe £20,000 or less
Don’t own your own home
Don’t have other assets or things of value
Don’t have much spare income

You don't have to make payments towards most types of debt included in your DRO and your creditors can’t force you to pay off the debts. A DRO usually lasts a year unless your situation improves. When the DRO ends, most of your debts will be written off.

You’ll need to speak to a special DRO adviser who will help you fill in an application to the official receiver. The adviser can’t charge you for their time but there's a £90 fee to make a DRO application.

Check if you can get a DRO

You should be able to get a DRO if all of the following apply:

You're unable to pay your debts

 

Your qualifying debts are not more than £20,000
 

You’ve got no more than £50 left over each month after you’ve paid your usual household expenses
you don’t own your home

 

Other savings or things of value you own, called assets, are worth no more than £1,000 (some assets are ignored when working out the value, for example, basic household items and tools you need to do your job)
 

You don’t own a car worth £1,000 or more, unless it’s one that’s been specially adapted because you have a disability


It's been at least 6 years since your last DRO was made and you aren’t going through another formal insolvency procedure, such as bankruptcy or an individual voluntary arrangement (IVA)


You've lived, had a property, or worked in England or Wales in the last three years

Check if a DRO is right for you

A DRO can provide a way out of debt. However, it's important to know the impact a DRO will have on all areas of your life before you apply. For example:


if any of your debts are for goods bought on hire purchase, you might need to give the goods back


your DRO will stay on your credit record for six years - this might make it difficult for you to get credit or find a new home in the future


if you have a tenancy agreement it could be affected, your DRO adviser can check this
 

your bank might close your account and you’ll need to open a new one
if you hold a power of attorney over someone else's financial affairs or someone else has one for you, this will end

 

it might affect applications you make for British citizenship - if you are unsure then you should get advice from an immigration specialist
 

You’ll also have to follow certain rules, called 'restrictions', during the DRO period. This means:
 

You can't borrow £500 or more without telling the creditor about the DRO
 

You can’t get involved in promoting, managing or setting up a limited company, or be a company director, without getting permission from the court
 

If you have a business under a different name from the one under which you got the DRO, you’ll have to tell everyone you do business with the name you used when you got the DRO
 

While the DRO is in force, and for three months afterwards, your details will appear on the Insolvency Service’s Individual Insolvency Register, which can be viewed by anyone

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