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Debt Relief Order

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How a Debt Relief Order works

A Debt Relief Order, or DRO, freezes debt for a year then writes it off completely if your circumstances haven’t changed. You may be suitable if you are on a low income with very few assets.

Once a Debt Relief Order application is approved, you are not required to make further payments to your qualifying debts.

Can I apply for a Debt Relief Order?

You can apply for a Debt Relief Order if:

  • you have qualifying debts of less than £30,000
  • you don’t own things of value or have savings over £2,000
  • you don't own a vehicle with a value more than £2,000
  • you have £75 or less spare each month after paying your household bills
  • you live in England or Wales or have lived or run a business in England or Wales in the last 3 years. 

You can’t apply for a Debt Relief Order if:

  • your creditors have applied to make you bankrupt but the hearing hasn’t yet taken place (unless your creditors agree that you can still apply)
  • you have been given a Bankruptcy Restrictions Order or Undertaking
  • you have petitioned for bankruptcy but your petition has not yet been dealt with – however, this doesn’t apply if you’ve petitioned for bankruptcy and the judge has referred you for a debt relief order instead
  • you’re currently bankrupt
  • you have an Individual Voluntary Arrangement or are applying for one
  • you have had a Debt Relief Order (see next section) in the last six years
  • you have been given a Debt Relief Restriction Order or Undertaking.

Which debts can I pay off with a Debt Relief Order?

The debts you can use a Debt Relief Order for are called qualifying debts. They include money you owe on:

  • loans
  • overdrafts
  • catalogues
  • credit cards
  • rent, Council Tax
  • utility and phone bills
  • benefit overpayments
  • in-store credit agreements
  • money owed to HM Revenue & Customs, like Income Tax or National Insurance Contributions

Which debts can’t I pay off with a Debt Relief Order?

The debts you can’t use a Debt Relief Order for include:

  • student loans
  • Social Fund loans
  • confiscation orders
  • magistrates’ court fines
  • child support and maintenance arrears.

For all the debts you can and can’t include in a DRO, get in touch with a free Debt Free Advice Advisor.

How do I apply for a Debt Relief Order?

You can only apply for a Debt Relief Order through an approved person known as an intermediary. Most free debt advice providers, including Debt Free Advice, have approved intermediaries who can help you.

It costs £90 to arrange a Debt Relief Order and you can pay in instalments over six months.

You need to pay the fee in full before your application will be looked at.

Once you have applied and paid the fee, an Official Receiver will grant the Debt Relief Order if you are eligible.