Debt Relief Order (DRO)

We do not offer this solution in house, however, we can assist you under special circumstances if we identify any language barrier or physical or mental vulnerability in our session.

What is it?

A Debt Relief Order is an order given by the Insolvency Service to inhabitants of England, Wales, and Northern Ireland. It is intended to assist debtors with less than £50,000 in debt, a monthly disposable income of £50 or less, assets worth less than £4,000, in submitting an application to their creditors to freeze interest and further action for a period of 12 months without repayment to the debt.

As with other statutory solutions, an authorised intermediary will conduct an affordability assessment before assisting the debtor with an application to the Insolvency Service for a DRO. When determining the debtor’s ability to repay the debt, this evaluation will take into consideration basic living expenses and assets. If there is no available payback, the order may be issued. During the order, the Official Receiver will also oversee the Debt Relief Order and communicate with creditors.

A Debt Relief Order typically lasts 12 months, during which time a debtor is subject to certain restrictions, including the inability to obtain further credit of more than £500 without disclosing to the lender that they are subject to a DRO, and the inability to act as a company Director without the court’s permission. If there has been no change in the debtor’s circumstances, the debts are ordered to be wiped off at the conclusion of the order, and creditors cannot lawfully pursue the debtor for additional payments.

How do you apply for a Debt Relief Order?

First, contact us and will assess your situation to see whether you qualify for a Debt Relief Order. We do not offer this solution in house, however, we will refer you to an aided intermediary.

Cover Debts

credit cards, overdrafts and loans
arrears with rent, utility bills, telephone bills, council tax and income tax
benefits overpayments
hire purchase or conditional sale agreements
buy now – pay later agreements
bills for services like vets or solicitors
debts you owe to friends and family
business debts

Uncover Debts

magistrates court fines and confiscation orders relating to criminal activity
child support and maintenance
student loans
social fund loans
compensation for death and injury

How do you qualify for DRO?

you are unable to repay your debts
debts must be less than £50,000
assets must be valued less than £4,000
must have less than £50 per month disposable income (i.e., income minus regular household spending leaves less than £50 per month)
you must have lived in England or Wales for the previous three years.
must not be in any other type of insolvency, such as IVA or bankruptcy, or have been subject to a Debt Relief Order in the last 6 years

Advantages:

an official of the court will offer to your creditors a reasonable and affordable formal repayment arrangement.
It binds all creditors who are subject to the order and stops them from conducting additional collection action against you.
ordinarily, an order is only valid for 12 months.
debts subject to the order that you cannot afford to repay will be wiped off if the order is successfully completed
without the court’s consent, none of the creditors named in the DRO application may take any action against you
There is no court fee charge.

Things to Consider:

the DRO’s name appears on a public registry
if you own your home, even if it has no equity, you will be unable to obtain a DRO.
if you do not comply with the official receiver during the year your DRO is in effect, your DRO may be revoked
you cannot operate as a director or be engaged in the management of a firm unless the court approves
if you get credit of £500 or more without declaring that you are subject to a DRO, you will be breaking the law
you may have a debt relief restrictions order made against you for 2 to 15 years if you acted irresponsibly, recklessly or dishonestly
a DRO could affect your employment or future employment if you work in a licensed role such as a publican, solicitor, financial advisor etc.
a DRO is registered against your credit file for a minimum of 6 years and will affect your ability to obtain further credit
if you acted carelessly, recklessly, or dishonestly, you might face a debt relief restrictions order for 2 to 15 years
if you operate in a licenced profession such as a publican, solicitor, or financial adviser, a DRO may have an impact on your current or future employment.
a DRO is recorded on your credit report for a minimum of six years and will hinder your ability to get new credit.