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Debt Relief Order (DRO)

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A Debt Relief Order (DRO) is an agreement designed to help people with little to no spare income, who don’t own their home, and have debt of £20,000 or less, pay it back over time.

What is a Debt Relief Order and how does it work?

Set up through a DRO advisor and the Insolvency Service, a Debt Relief Order allows payments to be paused on the debts you owe for a period of 12 months. Once you’re in a DRO, your creditors can’t force you to make any payments, and they can no longer pursue you for the debts.

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There is a £90 set-up fee to apply for a DRO. This doesn’t have to be paid in one lump sum and your application won’t progress until it has been paid in full.

If you’re still unable to pay them after the 12-month period has ended, any remaining debts will be written off.

This type of arrangement is only available in England, Wales and Northern Ireland.  Scottish residents may be able to apply for a similar solution, called a Minimal Asset Process (MAP).

Am I eligible for a Debt Relief Order?

To be eligible for a DRO, you must meet these criteria:

  • You must be a resident of England, Wales or Northern Ireland.
  • You cannot own or have a mortgage on your own home.
  • You must not owe more than £20,000 in unsecured debt (or £15,000 if you live in Northern Ireland).
  • You must be unable to make the minimum repayment on your debts.
  • You cannot have a current insolvency agreement (such as an IVA).
  • Your monthly disposable income must be £50 or less.
  • You cannot own assets worth more than £1,000 (excluding your car).
  • If you own a car, it must be worth less than £1,000.

You must continue to meet these conditions throughout your DRO. If your circumstances improve, the order can be revoked – meaning your debts are reinstated (with any interest added) and become your responsibility again.

How much does a Debt Relief Order cost?

A DRO costs £90 to set up. This amount is paid directly to the Insolvency Service – a government department that’s set up to help people facing problem debt and supporting creditors to receive what is owed to them.

The £90 payment doesn’t have to be made all at once – but your application won’t be progressed until it’s paid in full.

The debt adviser you work with will explain to you how this payment works, including when and how it should be made.

What debts are covered by a Debt Relief Order?

  • Personal loans
  • Credit cards
  • Rent arrears
  • Overdue utility bills
  • Tax and National Insurance underpayments
  • Overdrafts
  • Benefits overpayments
  • Telephone and broadband bills
  • Council tax

What debts are not covered by a Debt Relief Order?

  • Criminal fines – e.g. court or confiscation fines
  • Student loans
  • Social fund loans
  • Compensation for a death/injury
  • Child maintenance/support

If you have a debt that’s not listed here and you’d like to know if it can be included, speak to one of our advisers.

Will a Debt Relief Order impact my credit score?

It’s important to understand that a DRO will have a negative impact on your credit rating and, as with most financial matters, it will remain on your credit report for six years from the date the agreement begins.

Your credit rating reflects your ability or willingness to repay money that you owe, and can affect you obtaining further credit and contract-based products such as mobile phones or insurance.

While a DRO will impact your credit score, it will have a significantly less negative impact than having numerous ongoing arrears and having action taken against you.

Your credit rating will also begin to improve once you have your debts back under control.

A DRO also comes with financial restrictions. While it’s in place, you won’t be able to:

  • Borrow more than £500, open a bank account, or manage a business without notifying the lender of your DRO.
  • Produce, manage, or endorse a company without the court’s consent.
  • Be a director of a company.

If you’re not sure about what you can and cannot do while in a DRO, it is always best to contact your DRO adviser.

How do I set up a Debt Relief Order?

You can’t set up a Debt Relief Order by yourself. An application for a DRO is a detailed process that must be done through a DRO adviser or an organisation approved by the Insolvency Service.

Our team of experienced advisors know what the Insolvency Service looks for in a person’s financial situation – so we’ll be able to help you find the solution that’s exactly right for you.

How long does a Debt Relief Order take to process?

The official part of the DRO process – awaiting confirmation from the Insolvency Service – takes up to ten working days.

This is the time they need to look over your application and decide whether or not you qualify.

The overall process will take a little longer. We’ll need to discuss your situation and request certain personal information i.e. the names of the companies you owe money to, details of those debts, and information about your income, benefits, and cost of living.

The quicker you come through with this information, the shorter the DRO process will be.

How long does a Debt Relief Order last?

A DRO typically lasts 12 months. Assuming your financial situation doesn’t improve during those 12 months, the debt that’s listed on the DRO will be written off.

However, if your financial situation changes – even if it’s just enough to lift you over the eligibility criteria listed above – your Debt Relief Order is likely to be revoked, allowing you to make repayments toward your debt again.

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Does a Debt Relief Order affect your credit rating?

A DRO will have a negative effect on your credit rating, however, this is still likely to be less negative overall than ongoing arrears and having action taken against you if you cannot pay what you owe.

Your credit rating reflects your ability or willingness to repay money that you owe, so it will begin to improve again when your debts are back under your control and you have the means to work on paying them off.

As with most financial records, a DRO will stay on your credit file for six years after the date of commencement.

Can you get a mortgage or other credit with a Debt Relief Order?

You won’t be able to get a mortgage while you have a Debt Relief Order in place. It’s extremely unlikely you would meet the mortgage lenders’ strict affordability and creditworthiness criteria.

If you did, owning a home would make you ineligible for the DRO.

If you’re hoping to obtain credit, you will face similar problems. Your disposable income of less than £50 means that you are unlikely to be able to afford the repayments, so you won’t pass the affordability checks that lenders will perform.

If you do seek credit and find a lender who is willing to offer it to you, you must be aware that it is against the law to borrow more than £500 without first declaring to the lender than you’re in a DRO.

Is a Debt Relief Order a good idea?

There are many different ways of dealing with problem debt, but if you think you will struggle to pay back the amount you owe and you fit the strict criteria for a Debt Relief Order, then a DRO could be the best option for you.

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Frequently asked questions.

Need more info? Here are a few of our most frequently asked questions on this topic. If you don’t see the answer you’re looking for here, give us a ring – we’d love to help.


Unfortunately, if one of your debts has reached the stage where you are being contacted by bailiffs, a debt relief order will not stop them from taking your belongings through a controlled goods agreement.

In order to qualify for a debt relief order, you need to have an overall debt level of £20,000 or less and have less than £50 left after all your regular expenses.

You also must have lived in England or Wales for at least three years.

A debt relief order normally lasts for 12 months, and the companies you are in debt to will not be able to take any action against you or attempt to collect money during this time. You will also not be able to take out any further credit over £500 without making the company aware that you are on a debt relief order.

Once the year has ended, as long as your circumstances haven’t changed, your debts will be written off.

You can include most unsecured debts in a debt relief order, such as credit cards, loans, council tax, income tax, utility bills and rent arrears.