Debt Relief Order (DRO)

If your debts are less than £20,000, you are not a home owner and you have a low income, an alternative to bankruptcy that you should consider 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 and then your unsecured debt is written off. However you do not have to make any payments towards your debts during this time.

Note: A DRO is only available for those living in England, Wales & Northern Ireland. If you live in Scotland this solution is not available and you will need to consider alternative solutions such as a Debt Arrangement Scheme or Trust Deed.

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

However to qualify for a DRO you must fit within some very strict criteria:

  • Your total unsecured debt must be less than £20,000
  • Your disposable income must be less than £50 per month
  • Your total assets must be less than £1000 (excluding your car which can also be worth up to £1000)
  • 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.

Other Debt Solutions might be suitable for you

A Debt Relief Order is not the only debt solution which might be suitable to resolve your debt problem. Before making your final decision to apply for a DRO you should also consider the other available debt solution options. For more information please see: Personal Debt Solutions

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”.

The Money Advice Service (MAS) are an independent service set up by the Government to provide people with free advice about all aspects of personal finances. For help from MAS if you are struggling with debt please follow this link: MAS – Help if you are struggling with debt.

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

How to start 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

Only a brief overview of the Debt Relief Order solution is given here. For more information, please see one of our dedicated information websites:

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