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Debt Relief ORder

What is a Debt relief Order?

A Debt Relief Order or DRO is a new form of Bankruptcy that was introduced in 2009. The purpose of a Debt Relief Order is designed to be a cheaper, simpler and quicker alternative to Bankruptcy; designed for people who have few or no assets.

Read on to find out more about a Debt Relief Order or fill in the form and one of our advisors will contact you to advise on your debts.

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Debt Relief Order Questions and Answers

What are the criteria for a Debt Relief Order?

There are certain criteria involved in doing a Debt Relief Order which will determine if it is a suitable solution for you.

In England & Wales

Your Debts do not exceed £30,000.
Your assets must not exceed £2,000. Vehicles are negotiable providing it is not of higher value than £2,000.
Your disposable income must not exceed £75 per month. (Disposable income is the amount left over each month after all living expenses have been paid.

In Northern Ireland

Your Debts do not exceed £20,000.
Your assets must not exceed £1,000. Vehicles are negotiable providing it is not of higher value than £1,000.
Your disposable income must not exceed £50 per month.

You must also be unable to pay your debts (classed as insolvent) and not have had a DRO in the past 6 years.

There is a fee payable to The Insolvency Service of £90 for doing a Debt Relief Order. It can be paid in instalments but must be paid before the application can be made.

You cannot have been involved in another Insolvency Procedure at time of application of the Debt Relief Order. i.e...

An undischarged Bankrupt
In an IVA
In a Bankruptcy Restrictions Order
In a Debt Relief Restictions Order
In an Interim Order
Involved in a pending Debtors Petition for Bankruptcy where the court has not referred you to a Debt Relief Order as your most suitable method of Debt Relief
Involved in a Creditors Petition for Bankruptcy where you have not obtained the creditors permission to enter into the Debt Relief Order

Advantages of a Debt relief Order

Your debts will be written off at the end of the Debt Relief Order, with exceptions.
Creditors involved in the Debt Relief Order application cannot take any further action against you, without court permission.
A Debt Relief Order is complete after 1 year.
The fee for applying for a Debt Relief Order is a lot more affordable than the fees for Bankruptcy and can be paid in instalments before the application is made.
You can keep your assets (not exceeding £1,000) and a vehicle (not exceeding (£1,000)
Only an approved intermediary can put through a DRO for you. They will ensure that you are sutiable and fit the criteria required for a DRO.

Disadvantages of a Debt Relief Order

Your Debt Relief Order is entered on a public register.
Only an approved intermediary can complete a Debt Relief Order i.e. The Citizens Advice Bureau.
You cannot have a DRO if you are a homeowner.
You will still be responsible for paying certain debts - such as Student Loans, fines and debts arising from family proceedings.
Your employment could be affected
Your DRO could be withdrawn if you do not cooperate with the Official Receiver during the year that your DRO is in place.
You cannot act as a company director or manager unless the court agrees.
You will be committing an offence if you obtain 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 if you have behaved irresponsibly, recklessly or dishonestly.

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