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What is a Debt Relief Order?

A Debt Relief Order is a low-cost alternative to bankruptcy, for those who are struggling with debt, who do not own a home or valuable assets and have a low surplus income and total unsecured debts less than £20,000. A DRO is obtained from the Official Receiver, who is an officer of the bankruptcy court and a civil servant.  DROs must be applied for through an authorised debt adviser, who will assist you in completing the paperwork and assessing your eligibility.

  • In a DRO, you are usually discharged from your debts after 12 months
  • During this time, you pay nothing towards them
  • If, at the end of the year, your circumstances have not changed, your debts are written off
  • DROs are a formal debt solution, but you do not need to appear in court
  • DROs are available in England, Wales, and Northern Ireland
  • If you live in Scotland, you might consider a Minimal Assets Process (MAP)
  • DROs are generally used as a last resort for those struggling with debt
  • You cannot apply for a DRO yourself, you must first consult a DRO advisor, who works on your application with you
  • The cost for a DRO is £90
  • DROs do not cover all types of debt, but they do cover unsecured debt such as credit cards, overdrafts, payday loans, and arrears in rent or bills
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To be eligible for a DRO, you must meet the following criteria:

  • You must not be a homeowner
  • You must have no more than £20,000 of unsecured debt
  • You must have less than £50 surplus income per month
  • Your assets (excluding any motor vehicle) must not be worth more than £1,000
  • Any motor vehicle you own is not worth more than £1,000
  • You must not have been granted a DRO in the last six years
  • You must not currently be going through any other insolvency procedure
  • You have lived or worked in England or Wales within the last 3 years

If you meet these criteria a debt relief order could be the right solution for you.

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The Process


A Debt Relief Order is a year-long legal insolvency procedure. The process is as follows:

  1. Discuss your situation with a debt relief order expert

Most Citizens Advice Bureaux, and other debt charities, have a DRO advisor. The advisor will take a look at your situation, and let you know whether you are eligible for a DRO.

  1. Submit your application

If you are found eligible and wish to apply for a DRO, your application, along with the £90 fee, must be submitted by your DRO advisor to the Official Receiver at the Insolvency Service. This is the body responsible for insolvencies in England, Wales, and Northern Ireland. In some cases a charity may be able to help with the cost, you should ask your debt adviser.

  1. Freeze your debts

If your DRO application is accepted, the value of your debts will be frozen for one year, and you will not be expected to make any more payments towards them. During this time, your creditors can not take legal action against you.

  1. Have your debts written off

If, at the end of the year, your circumstances have not changed, and you would still find yourself unable to pay off the debts included in the DRO in a reasonable amount of time, they will be written off completely. A DRO can be cancelled if your finances improve or you do not co-operate with the Official Receiver.

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Debt Relief Order Advantages

Applying for a DRO is usually considered a last resort for dealing with debt, but if you do choose this option, you will benefit from certain advantages:

  • A DRO is less costly than bankruptcy
  • You will no longer make payments to your unsecured debts
  • If your circumstances have not improved at the end of the year, your debts are completely written off
  • Creditors can no longer hassle you with stressful letters and phone calls, and can take no legal action against you whilst the DRO is in place
  • All unsecured debt can be included in a DRO
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Debt Relief Order Disadvantages

DROs are not without their disadvantages, however:

  • If your circumstances improve, your DRO may be revoked, you will again become responsible for your debts, creditors can contact you, and you will have to seek out an alternative solution
  • The eligibility criteria for receiving a DRO are strict
  • You cannot borrow more than £500 without telling the lender about your DRO
  • You cannot establish or direct a company without court permission whilst the DRO is in place
  • A record of the DRO will appear in the publicly accessible Insolvency Register
  • Being granted a DRO will negatively impact your credit score, meaning accessing credit in the future could be difficult and expensive
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Get Help and Advice

If you would like to further discuss your options for dealing with debt, one of our advisors would be happy to confidentially review your situation with you, free of charge. Give us a call on 0808 253 3433. Alternatively, text ‘ADVICE’ to 60060.

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