Debt Relief ORder (DRO)

What is a Debt relief ORder?

A Debt Relief Order or DRO is a formal debt solution, that is free to apply for and is designed to help if you have unaffordable debt, are on a low income and have little to no assets. It is currently available to residents of England, Wales and Northern Ireland. Debts are written off in a DRO, usually after 12 months of successful application.

Criteria for DRO application

There are certain criteria that you must meet in order to apply for a DRO. The criteria is slightly different depending on what region you live in.

In England and Wales:

• Your total debts cannot exceed £50,000.
• You must have assets that total no more than £2,000 in value.
• If you own a car or vehicle, it cannot have a value above £4,000.
• Your disposable income left over each month must be below £75 (This is your household income minus your bills for expenses and cost of living).

In Northern Ireland:

• Your total debts cannot exceed £20,000 (Limit is increasing to £50,000 on July 8th 2024).
• You must have assets that total no more than £1,000 in value (Limit is increasing to £2,000 on July 8th 2024).
• If you own a car or vehicle, it cannot have a value above £2,000.
• Your disposable income left over each month must be below £50 (This is set to increase to £75 per month on 8th July 2024).

A Debt Relief Order will last for 1 year, and once it has ended you are released from your debts (with certain exceptions).

If a Debt Relief Order is considered suitable, you will be referred to an approved intermediary*. They will check that your situation fulfils the DRO criteria and will help you complete the online application form. They will submit it on your behalf to a government official called the official receiver. The official receiver then makes the order, if appropriate.

*An approved intermediary is someone who has been approved by a competent authority chosen by the government.

DRO Advantages

• Your debts will be written off at the end of the Debt Relief Order. There are a few exceptions, as explained in the disadvantages below.
• None of the creditors listed in the Debt Relief Order application can take further action against you without the court’s permission.
• It allows you to make a fresh start after
  1 year.
• There is no fee for application.
• You will keep your assets and a vehicle as detailed above.
• The approved intermediary ensures that you are given appropriate advice and that you fit the criteria for a Debt Relief Order.

DRO Disadvantages