Debt Relief Order (DRO)

What is a Debt Relief Order?

A Debt Relief Order (DRO) is a low-cost alternative to bankruptcy as long as you have a low disposable income, low debts and low assets and you meet the qualifying criteria.

In England and Wales, DROs are available if you have:

• Assets worth less than £2,000
• A car worth less than £2,000
• Debts less than £30,000
• A disposable income of less than £75

In Northern Ireland, DROs are available is you have:

• Assets worth less than £1,000
• A car worth less than £1,000
• Debts less than £20,000
• A disposable income of less than £50

You cannot apply for a DRO if you have another insolvency procedure in place (such as an active IVA or bankruptcy) and you can only make an application through an authorised intermediary.

You will not be expected to make any payment into a DRO which lasts for 12 months. As long as your circumstances have stayed the same, at the end of the 12 months your debt will be written off any you will be released from your DRO.

Points to consider

• You can’t have a DRO if you’ve had one in the past 6 years.
• You must include ALL your unsecured debts. You can’t select which ones to include in your DRO.
• If you have a change in circumstance during the 12-month period, such as an increase in your disposable income or you acquire any assets worth more than £4,000 (including a vehicle worth no more than £2,000), dependent on your circumstances your DRO may be revoked and all your debts, plus accruing interest, will become recoverable again.
• Homeowners are excluded from applying for a DRO, even if there is negative equity in the property.
• A one-off fee of £90 has to be paid to the Official Receiver.
• A DRO remains on public records for 15 months and will stay on your credit record for 6 years.

Restrictions of a DRO

You will be subject to the following restrictions:

• You may not obtain credit of £500 or more, either alone or jointly with someone else, without telling the lender you are subject to a DRO.
• You may not trade (directly or indirectly) in a name that is different from the name under which you were granted a DRO, without telling all those with whom you do business, the name under which you were granted a DRO.
• You may not be involved (directly or indirectly) with the promotion, management or formation of a limited company, or act as a company director, without the court’s permission.
• You will only be able to obtain a DRO once every six years.
• You may also be subject to a Debt Relief Restrictions Order. This can extend the period of restriction for up to 15 years for debtors who are deemed dishonest or culpable to the extent of their financial difficulties. An example of this is hiding assets or continuing to borrow knowing you have no chance of making repayments.

Fees and Charges

An application must be made to the Official Receiver’s office through an authorised intermediary. The Official Receiver’s fee is £90. Intermediaries are not allowed to charge you a fee for submitting your DRO application.

Help and Advice

If you’re considering a DRO as a solution to your debts, complete our online form today and see if you qualify and find out how much debt you could write off.