If your debts are less than £30,000, you are not a home owner and you have a low income, an cheaper alternative to bankruptcy is a Debt Relief Order (DRO).

Included in this article:

What is a Debt Relief Order?
DRO Qualification Criteria
How to get a DRO
Additional Information

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What is a Debt Relief Order (DRO)?

The affect of a DRO is very similar to Bankruptcy. In the same way as bankruptcy, it lasts for 12 months. After that, your debt is written off.

However, unlike bankruptcy you will never be asked to make any payments towards your debts.

The significant advantage of a DRO over bankruptcy is the cost which is just £90 compared to the much higher Bankruptcy fee.

A DRO is only available for those living in England, Wales & Northern Ireland. If you live in Scotland this solution is not available.

Debt Relief Order Qualification Criteria

However to qualify for a DRO you must fit within some very strict criteria. These were updated in June 2021:

• Your total unsecured debt must be less than £30,000
• Your disposable income must be less than £75 per month
• Your total assets must be less than £2000 (excluding your car which can also be worth up to £2000)
• You must not be a home owner (whether or not the property is in negative equity)

If you do not meet all of these criteria then you will not be allowed to start a Debt Relief Order and you will need to consider an alternative debt management solution.

How to get a Debt Relief Order

Wilmott Turner is able to advise you on whether or not a Debt Relief Order is right for you. However we cannot help you implement this debt solution.

If you decide that you want to apply for a DRO we suggest that you contact the Step Change debt Charity who will be able to manage your application for you.

Additional Information from Wilmott Turner

More information about the solution is available in the left hand column. However only a brief overview is given here. For more details and advice please see one of our dedicated information websites:

Beat My Debt – Debt Relief Order

Government advice about personal debt solutions

As well as the information found on this website the Government’s Insolvency Service has produced a useful guide to personal debt solutions which you might also find useful: “In Debt – Dealing with your creditors”.

Money Helper (provided by the Money & Pension Service) is an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For further information, please follow this link: Help if you are struggling with debt.

It is also recommended that you read this one page document produced by the Money & Pensions Service entitled “Dealing with debt – 5 things you should know”.