Debt Relief Orders

What is a Debt Relief Order (DRO)?

A Debt Relief Order (DRO) is a way of dealing with your debts if you cannot afford to repay them.  It means that you do not have to pay certain kinds of debt for a specified period (typically 12 months).  It is very similar to a Bankruptcy. 

At the end of the period, the debts are written off.

Why can apply for a DRO?

Not everyone would be able to apply for a DRO.  It order to qualify, you must meet the following criteria:

• You owe £15,000 or less
  
• You have less than £50 to spend each month, after paying tax, national insurance and normal household expenses
  
• You have lived or worked in England or Wales in the last three years
• Your assets are no greater than £300 in value
  
• You have not had a DRO in the previous six years

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How do I apply for a DRO?

You would need to apply for a DRO through an "Approved Intermediary" (the Citizens Advice Bureau is an example)

They would assist you in completing the application, which would then be sent to the Official Receiver at The Insolvency Service together with a fee of £90.  The Official Receiver would then decide whether to grant the DRO or not. 

What debts are not written off under a DRO?

Not all debts "qualify" within a DRO and therefore would not be written off after the one year period.  An example of the debts not written off are as follows:

• Child maintenance or anything you owe under family proceedings
  
• Student loans
  
• Budgeting and crisis loans from the Social Fund
• Debts secured against your assets (ie, Hire Purchase liabilities, mortgage liabilities)
  
• Fines for drug offences
• Damages or fines that a court has ordered you pay
  
• Unpaid TV license fees
  
• Any debts incurred AFTER the DRO has been granted.

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