Debt Relief Order

Debt Relief

You should first seek debt advice, and if a DRO is considered suitable, you will be referred to an approved intermediary. They will check that your situation fulfils their criteria, help you complete the online form, and submit it for you to a government official receiver(if appropriate). The official receiver then makes the order.

To get a DRO:

  • Your debts must not exceed £15,000;
  • Your assets must not exceed £300 (certain assets do not count, e.g. clothing, furniture and a vehicle worth less than £1000);
  • Your surplus income must not exceed £50 a month after paying your essential personal and household spending.

A DRO will last for 1 year; once your DRO has ended you are released from your debts (with certain exceptions)

 

Pros

Cons

Your debts will be written off at the end of the DRO. There are a few exceptions, as explained opposite. Your DRO is entered on a public register. You can’t have a DRO if you have an existing bankruptcy order, an IVA, are subject to bankruptcy restrictions, or you have been in a DRO in the last 6 years.
None of the creditors listed in the DRO application can take further action against you without the court’s permission. You won’t be able to have a DRO if you own your own house.
It allows you to make a fresh start after 1 year. Your DRO is entered on the public register.
The fee (£90) is affordable and can be paid before the application is made. You will remain liable to pay certain debts at student loans, fines and family proceedings.
You will keep your assets and a vehicle as detailed above. Your employment may be affected.
The approved intermediary ensures that you are given appropriate advice and that you fit the criteria for a DRO. Your DRO could be revoked of you don’t co-operate with the official receiver.
You will be committing an offence if you get credit of £500 or more without disclosing that you’re on a DRO.
You may have a debt relief restrictions order made against you for 2 to 15 years if you acted irresponsibly, recklessly or dishonestly.