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Debt Relief Order FAQs

When you’re considering a Debt Relief Order (“DRO”), it can be difficult to know where to begin. Why not take a look at our frequently asked questions about DROs and learn about the basics. You can also request a free callback and have a chat with one of our team members to discuss whether a DRO is the right debt solution for you.

A DRO is an insolvency procedure to deal with unmanageable debt if you meet the criteria.

A DRO freezes your debt repayments and interest for 12 months. If your financial situation hasn’t changed at the end of this period, then all of the debts included will be written off.

A DRO can be considered a low-cost alternative to bankruptcy; however, to apply you have to meet certain criteria:

  • Your level of debt must be less than £20,000
  • You must live in England, Wales or Northern Ireland
  • You must have less than £1,000 in assets and a car worth no more than £1,000
  • You must have less than £50 in surplus income per month after paying your household bills and living costs
  • You can’t apply if you’re a homeowner

To apply online for a DRO, an individual must go through an intermediary. This third party is considered an approved debt adviser who has permission to offer advice regarding a DRO and complete relevant documents.

The Insolvency Service’s Official Receiver administers DROs. To locate an intermediary, contact an authority listed on the Insolvency Service website or a local Citizens Advice Bureau.

You’ll need to pay the Insolvency Service a one-off fee of £90. You can’t get any discounts so the full £90 is payable before you can submit your application.

The fee can be paid in one lump sum or, if you live in England or Wales, in instalments over six months. Once your fee has been paid and your application is submitted, you can’t get your money back, even if the DRO is rejected or revoked.

If you are in a DRO your creditors can’t pursue you for your debts during the 12 months. Once the DRO is complete, the debt will be written off, and you will no longer be liable.

DRO’s are not available if you live in Scotland. In Scotland, a Minimal Assets Process (MAP) bankruptcy is a similar solution but has different benefits, risks and fees associated with it.

The following are considered debts by a DRO: credit card balances, overdrafts, loans, conditional sale agreements*, buy now pay later contracts, hire purchase agreements*, rent arrears, utility arrears, telephone charges, Council tax arrears, Benefit overpayments, and Social fund loans.

*Please note that goods obtained through hire purchase or conditional sale agreements are likely to have to be returned.

You are not allowed to take out credit during the 12-month term of your DRO. At the start, a default will be registered on your credit file and will stay there for six years.. Therefore, you may find it difficult to obtain additional credit or open a bank account even after the DRO has finished. You may also be asked if you have ever previously applied for a DRO on future credit applications.