A Debt Relief Order (DRO) is one solution available to help you take back control of your finances. A DRO is a cheaper option to bankruptcy.
If you can’t afford to pay off your debts and you meet the set criteria (see below), a DRO is a good option to explore. If granted, most of your creditors won’t be able to take legal action against you to recover your debts for 12 months. After this time, the remaining debts included in the DRO are written off so that you can start afresh.

Can I apply for a DRO?

You are able to apply for a DRO if:

  • The total of your debts is less than £20,000 (£15,000 in Northern Ireland)
  • You don’t own your own home
  • After all your regular monthly outgoings are paid, you have less than £50 per month to pay towards your unsecured debt
  • Any assets you own are worth less than £1,000 in total (£300 in Northern Ireland)
  • You’ve lived or worked in England and Wales within the last 3 years
  • You haven’t applied for a DRO in the last 6 years

How to apply for a DRO

If you think you meet the criteria for a DRO, the first thing you need to do is find a DRO adviser (known as an ‘approved intermediary’). Firstly, they’ll check that a DRO is right for you and that you do meet the criteria. If you do, they’ll make an application for you by applying to an official receiver through the Insolvency Service.

There is a £90 fee to pay to apply for a DRO.

What happens after a DRO is entered?

If you keep to the agreed conditions within the first 12 months, the debts included within your DRO will then be written off. This will enable you to continue to pay your current household bills and living costs (for example your rent, electricity, gas, council tax etc.) without having to pay money to your unsecured debts that you simply can’t afford.

During the 12 months, the creditors included in your DRO can’t take any legal action against you to recover the amount you owe.

Bear in mind that a DRO will have a negative impact on your credit report for 6 years. During this time it may be more difficult to borrow money. After the 6 years have passed, the DRO will be removed from your credit report and your credit rating should start to improve.

Things to consider:

  • Debt Relief Orders are legally binding, and so most creditors shouldn’t be able to contact you during.
  • A DRO may impact your employment. Until you have been discharged, you will not be permitted to hold certain public offices. You will also not be able to continue as the director of a limited company without permission from the court. If you have concerns regarding the specifics of your employment contract please seek independent advice on this matter.
  • DROs do not cover mortgages and other secured debts, magistrate court fines, debts payable after personal injury claims and debts to a student loans company.

Below are some charities and organisations that could help you in your situation


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“Disclaimer: No information on this website shall be construed as advice and content is offered for information purposes only. You should always seek advice from an appropriately qualified solicitor on any specific legal enquiry, an appropriately qualified Independent Financial Advisor on any specific financial matter, or an appropriately regulated and qualified debt management company. Full terms of use

Debt Free Direct is a trading name of Clear Start Partnerships Limited and is authorised and regulated to issue debt advice by the Financial Conduct Authority.

Simpson Millar LLP Solicitors is a limited liability partnership and is authorised and regulated by the Solicitors Regulation Authority.

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