What is a Debt Relief Order (DRO)?

A Debt Relief Order is a formal debt solution available to individuals who have a small amount of money left to offer towards their debts, have few assets and a relatively low amount of debt.

You may be eligible for a Debt Relief Order if you owe less than £20,000 in total to your creditors, you have £50 or less left over each month after your essential bills and outgoings have been paid, your car (if you have one) is worth less than £2000 and your other assets don’t exceed a total value of £1000.

A Debt Relief Order lasts for 12 months, and after this time you are released, and your debts written off.

There is an application fee of £90 which is paid to the Insolvency Service (the government) for the application to be reviewed and accepted.

What debts can be included in a DRO?

Most debts are included, but the following won’t be:

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Unpaid TV Licence Fees

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Court fines or criminal fines

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Secured debts

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Student loans

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Child maintenance

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Budgeting or crisis loans

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Debt incurred after the DRO is approved

What are the advantages and disadvantages of a Debt Relief Order?

Advantages:

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A DRO lasts for 1 year and you don’t need to make any further payments

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You will be debt free at the end of the 12 months

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Your creditors can’t take further action against you such as CCJs or appointing bailiffs

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You can pay the £90 fee in instalments

Disadvantages:

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Your credit file will be impacted for 6 years

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Employment could be affected for regulated or licensed professionals

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If you act irresponsibly, dishonestly, or recklessly, you could have a restrictions order against you for 2 to 15 years

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You can’t act as a director of a company or be involved in the management unless the court offers approval

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You can’t have a DRO if you’ve already had one in the last 6 years

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Your DRO will be listed on a public online register

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Some debts won’t be written off. See What debts can be included?

How can I apply for a Debt Relief Order?

You can only make an application for a DRO via an Approved Intermediary, and you will need to pay a fee of £90 to the Insolvency Service (the government) for the application to be reviewed and accepted.

Get debt advice and apply online using our Online Debt Advice tool or call us on 01925 599400.

Don’t have an account with us and are looking for debt advice?

Angel Advance provides online debt advice to get you back on track and make your finances more manageable.

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