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Debt Relief Order

A Debt Relief Order (Also known as a DRO) is a formal debt solution or Insolvency solution that is suitable if you are living in England & Wales and struggling with debts up to £30,000 and you have little or no assets (up to the value of £2,000) with a disposable income of no more than £75 per month.

You can do a DRO in Northern Ireland, but the criteria is slightly different, It is suitable for people with debts up to £20,000 and little or no assets (up to the value of £1,000) with a disposable income of no more than £50 per month.

A DRO is sometimes referred to as a form of mini-bankruptcy. It is also a much shorter and cheaper to do than Bankruptcy.

In a DRO you state your inability to pay your debts. After 12 months, any debt included in your Debt Relief Order will be written off. It generally costs £90 in fees for a DRO.

How do I start a Debt Relief Order?

To apply for a Debt Relief Order you will need to identify if you meet the conditions that apply. We can help you find out if it is a suitable option for you. If a DRO is suitable, we will refer you to an approved intermediary who handles these solutions (such as the CAB or Step Change). The approved intermediary is someone who is approved by a competent authority for handling these solutions. They will check that you fulfill the relevant criteria and help you complete the relevant forms necessary for applying for a DRO.

Pros of a Debt Relief ORDer

  • It can be a fresh start free from debt
  • Your debts will be written off on completion (with exceptions - see cons)
  • A DRO offers you protection from creditors. A creditor will need court permission in order to take any action against you.
  • The fee for a DRO is affordable and can be paid in instalments. The fee must be paid before the application is put forward.
  • You can keep assets and a car up to the value of £2,000 each (£1,000 each in NI).
  • Your DRO is complete in 12 months
  • The approved intermediary will run through everything to confirm it is your best option.

Cons of a Debt Relief Order

  • Your DRO will be entered on a public register
  • If you are subject to an existing Bankruptcy Order, Bankruptcy restrictions, an IVA, or have had a DRO in the last 6 years then you cannot do a DRO.
  • If you are a homeowner you cannot do a DRO.
  • Some debts cannot be included in the DRO - i.e. Student Loans, fines, some debts...
  • Your employment could be affected.
  • Your DRO can be revoked if you do not co-operate with the terms of the official recevier in charge of your case.
  • You cannot be a director of a company or involved in its management (unless agreed with by the court).
  • You cannot obtain credit above £500 without disclosing that you are subject to a DRO.
  • If you have acted irresponsibly, recklessly or been dishonest, you may have a Debt Relief Restrictions Order made against you for a period of 2 to 15 years.

Debt Relief Order Q and A

Below are a few of the frequently asked questions we are asked in relation to Debt Relief Orders. If you have any questions please feel free to get in touch and we will find the answers you need.

Only certain debts can be included in a Debt Relief Order

  • Unsecured Debts such as Credit Cards, Loans, Overdrafts etc...
  • Rent, Utilities, Phone and Council Tax
  • Benefits overpayments and Social Fund loans
  • Hire Purchase or Conditional Sale agreements
  • Buy now - pay later agreements

If you have a hire purchase or conditional agreement you may have to return the goods bought with these loans, unless someone else can pay the instalments. You will not be able to carry on paying for the goods once you have a debt relief order.

Certain types of debt can't be included in a debt relief order. You must pay these separately as action can still be taken against you. These include:

  • Child Support and Maintenacne
  • Student Loans
  • Court Fines and Confiscation Orders

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Debt Solutions is part of National Debt Relief We are a private company offering debt advice and solutions for people in debt. We will talk you through the options that are available to you. If you decide to go for one of our solutions there will be a charge for this service - Fee information
You can get free debt advice from MoneyHelper – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information

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