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A debt relief order is only available to individuals who have very little disposable income available to pay to their creditors, have few or no assets, and a limited level of debt. If you are eligible for a DRO we can help you with the application.
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 £1000 and your other assets don’t exceed a value of £1000.
A DRO will last for 1 year, and once your DRO has ended you are released from your debts (with certain exceptions).
We are able to process a DRO application for you, free of charge, but you will need to pay a fee of £90 to the Insolvency Service (the government) for the application to be reviewed and accepted.
You will not need to make any monthly payments to your debts
Your debts will be written off at the end of the DRO
None of the creditors listed in the DRO application can take further action against you without the court’s permission
The fee (£90) is affordable and can be paid in instalments but the fee must be paid before the application can be made
You will keep your assets and a vehicle as detailed above
Our trained staff, known as Approved Intermediaries, will ensure that you meet the criteria for a DRO and guide you through the process
Your DRO is entered on a public register
Your DRO will remain on your credit file for 6 years.
You can’t have a DRO if you have an existing bankruptcy order, an IVA, are subject to bankruptcy restrictions, or you have had a DRO in the last 6 years
You will remain liable to pay certain debts – in particular:
Your employment may be affected
Your DRO could be revoked (withdrawn) if you don’t co-operate with the official receiver during the year that your DRO is in force
You can’t act as a director of a company or be involved in its management unless the court agrees
You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to 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
* An order that will place restrictions similar to those in force while subject to a DRO, which the official receiver may apply for
You can’t have a DRO if you own your own home. Even if you have negative equity
As well as directorships, a DRO may affect your job if you’re in a certain type of profession for example, if you’re a solicitor, accountant or insolvency practitioner. You’ll need to speak to your HR department, or professional body to see if your membership will be affected. If you’re planning to apply for a role in finance or security your DRO may affect your employment prospects.
If your situation improves during the course of your DRO, for example your income increases or you receive a lump sum of money, you’ll need to let the Insolvency Service know so they can assess your situation and decide whether it will affect your DRO. There could be serious consequences if you fail to tell them that your situation has improved.
A DRO won’t usually affect an ongoing tenancy but you may struggle to renew/get a new tenancy whilst your DRO is in effect.
You can keep your car as long as it’s worth less than £1000, has been specially adapted for a disability, or is subject to the Motability scheme.
Yes, you have to include all qualifying debts (see ‘disadvantages’ for debts that don’t qualify). Once your DRO is approved you can’t add any debts to it so, if you miss a debt by mistake, you’ll remain responsible for paying it. If the debt takes you above the £20,000 threshold, your DRO may be revoked.
The full balance of any joint debts will be included in your application and will count towards the £20,000 limit however, the joint party isn’t protected so they will remain liable for the full balance of any joint debts.
Once your DRO is approved you don’t have to pay anything to your creditors so you can use whatever disposable income you have to save towards a holiday however, this will only be a small amount because you can only have a DRO if you have less than £50 left over each month.
Rent arrears are a ‘qualifying debt’ which means they will be included within your DRO and no payments will be made towards the debt. Your landlord can’t take steps to recover the arrears, but they can still evict you from the property. You can’t have an allowance within your budget to repay the arrears however, you can choose to use your disposable income (which will be less than £50 per month) towards your rent arrears.
During the 12 months that you’re subject to a DRO, you are protected from further action relating to your debts. Once this period ends, you will be discharged and freed from liability for those debts.