Debt Relief Order

A Debt Relief Order (DRO) is a formal debt solution for people with low income, few assets, and debts under 30,000 pounds. It freezes your debts for 12 months, and if your situation has not improved by then, the debts are written off. A DRO costs 90 pounds and must be applied for through an authorised debt adviser.

Here is how a Debt Relief Order works: 1. You apply through an authorised debt adviser (like Debt Free Advice) 2. The adviser submits your application to the Insolvency Service 3. Your debts are frozen for 12 months (the moratorium period) 4. Creditors cannot chase you for payment during this time 5. After 12 months, if your situation has not significantly improved, the debts are written off The 90 pound fee can be paid in instalments.

To qualify for a DRO, you must:

• Owe no more than 30,000 pounds
• Have no more than 75 pounds spare income per month
• Have assets worth no more than 2,000 pounds
• Not own a vehicle worth more than 4,000 pounds
• Not own property
• Not have had a DRO in the last 6 years
• Live in England, Wales, or Northern Ireland

A DRO covers most non-priority debts:

• Credit cards
• Personal loans
• Overdrafts
• Catalogue debts
• Some benefit overpayments

Some debts are NOT included:

• Student loans
• Court fines
• Child maintenance
• Social fund loans
• Debts from fraud

Advantages:

• Debts written off after 12 months
• Affordable - only 90 pounds
• Creditors must stop chasing you
• No court appearance required
• Fresh start after 12 months

Considerations:

• Affects credit rating for 6 years
• Details published on Individual Insolvency Register
• Some restrictions during the 12 months
• Cannot be a company director
• Must tell the Official Receiver if circumstances change

While your DRO is active, you:

• Cannot borrow more than 500 pounds without disclosing the DRO
• Cannot be a company director
• Must tell the Official Receiver if your income or assets increase
• May face restrictions in certain jobs or professions

If your situation improves significantly, your DRO may be revoked and you will need to repay your debts.

We can help you apply for a Debt Relief Order. Our authorised advisers can:

• Check if you are eligible
• Complete and submit your application
• Explain the process and what to expect
• Support you throughout

Contact us today for free, confidential advice.