Debt Relief

A Debt Relief Order (DRO) provides an option in dealing 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

If your DRO is approved:
your creditors may not recover money owed to them by you without the court’s permission
typically released from your debts after twelve months

How Can I Apply for a Debt Relief Order?

You’re generally eligible if you meet all of these criteria:
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.

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How do I Get a Debt Relief Order

You can arrange a DRO through a special adviser who will help you fill in an application to the official receiver. There is a £90 fee to make a DRO application.

If you are unable to make this payment, then approach a debt charity for support with the payment.

Debts not covered by a DRO

Not all debts are covered by a DRO. You’ll still need to pay:
magistrates court fines and confiscation orders relating to criminal activity
child support and maintenance
student loans
social fund loans
compensation for death and injury

If you have any of these debts they don’t count towards the £20,000 limit.

Are there any Restrictions on me when in a DRO?

In simple terms – Yes. You need to adhere to restrictions which include: –
If you borrow over £500 you must advise the lender of your DRO
Restrictions on remaining as a company director
Starting and operating a new company without the court’s authority
To open a new bank account, you must advise a financial institution of your DRO.

Restrictions last 12 months. If you act dishonestly, then this period may be extended.

What you need to know

When in a DRO you are required to pay:
rent and utility bills
student loans, court fines

DROs may cancel due to:-
A material change improving your finances.
Failure to co-operate with the official receiver.

If you grow your debt after the DRO. Then you face:-
a bankruptcy order
potential prosecution for failing to disclose your position.

Individual Insolvency Register

Once your DRO is approved, it is added to the Individual Insolvency Register. It is however removed three months after the DRO finishes.

Your DRO remains on your report for six years, therefore possibly affecting your credit score.