Debt Relief Order

A debt relief order (or DRO as it sometimes known) is an order which can be applied for by people who have no real prospect of paying off their debts and who meet a specific set of criteria. Debt relief orders are granted by the Insolvency Service and are a cheaper alternative to bankruptcy for those with lower debts and little spare income.

How does a debt relief order work?

A debt relief order provides protection from action against you by the creditors listed in the order. The DRO usually lasts a year and during this time you do not have to make any repayments towards the debts. At the end of the order you will no longer be held accountable for the debts.

Who can apply for a debt relief order?

Only a small percentage of people meet the specific conditions needed to qualify for a debt relief order.

Here are the specifics:

• You must have debts less than £15,000 - although only certain debts can be included
• After your household expenses, the money you have left should not exceed £50
• You must not have any assets or savings worth more than £300 - this includes property even if it is mortgaged.
• You must not own a vehicle worth more than £1000 (unless it has been specially adapted due to a physical disability)
• In the last three years you must have lived, had a property or carried on a business in England or Wales.
• You must not be currently bankrupt or have a bankruptcy hearing which is pending
• You must not have an Individual Voluntary Arrangement (IVA) or be in the process of applying for an IVA
• You must not have a Bankruptcy Restriction Order or Undertaking
• You must not have had a debt relief order in the last 6 years

How to apply for a DRO

In order to apply for a debt relief order you will first need to speak to an "approved intermediary", a specialist debt advisor who is authorised to give advice on DROs and who will submit your DRO application for you.

The cost of a DRO is £90. This fee must be paid in full before your application will be considered and it is non-refundable, even if your application is rejected.

What other debt solutions are available?

If you don't meet the criteria for a debt relief order, there are other debt solutions which could help you bring your finances under control, such as an Individual Voluntary Arrangement, a Debt Management Plan, or Bankruptcy.

Complete our short online contact form and one of our advisors will be in touch to determine your options.

What are my options? >>>

Where can I find further information about debt relief orders?

For further information on debt relief orders, including the restrictions put in place when a debt relief order has been approved and other conditions, download this document written by the Insolvency Service: Guide to Debt Relief Orders (pdf).