Debt Relief Order(DRO)

A Debt Relief Order (DRO), also referred to as a DRO, is a formal debt or insolvency solution appropriate for individuals residing in England & Wales who are experiencing financial difficulties with debts amounting to £30,000 or less. It is applicable when the individual possesses minimal to no assets (valued at up to £2,000) and has a disposable income not exceeding £75 per month.

A Debt Relief Order (DRO) is also available in Northern Ireland, albeit with slightly different criteria. It is applicable to individuals with debts not exceeding £20,000 and possessing minimal to no assets (valued at up to £1,000), along with a disposable income not exceeding £50 per month.

A Debt Relief Order (DRO) is occasionally described as a miniature version of bankruptcy. It is notably briefer and less expensive to pursue compared to full bankruptcy.

In a DRO, you declare your incapacity to repay your debts. After a 12-month period, any debt covered by your Debt Relief Order will be discharged. Typically, the cost for a DRO amounts to £90 in fees.

Advantages of a Debt Relief ORDer

• It offers a fresh start, freeing you from debt.
• Your debts will be discharged upon completion (with exceptions, as detailed in the cons section).
• A DRO provides protection from creditors. Court permission is required for any creditor to take action against you.
• The fee for a DRO is reasonable and can be paid in installments. It must be settled before the application is submitted.
• You can retain assets and a car valued up to £2,000 each (£1,000 each in Northern Ireland).
• Your DRO is concluded within 12 months.
• The approved intermediary will thoroughly review everything to ensure it is your optimal choice.

Disadvantages of a Debt Relief Order

• Your DRO will be listed on a public register.
• If you are currently subject to a Bankruptcy Order, Bankruptcy restrictions, an IVA, or have had a DRO within the last 6 years, you are ineligible for a DRO.
• Homeowners are not eligible for a DRO.
• Some debts are not covered by the DRO, such as Student Loans, fines, and certain other debts.
• There could be implications for your employment.
• Your DRO may be revoked if you fail to comply with the terms set by the official receiver overseeing your case.
• You cannot serve as a director of a company or be involved in its management (unless approved by the court).
• You cannot acquire credit exceeding £500 without disclosing your DRO status.
• If you have behaved irresponsibly, recklessly, or dishonestly, you may face a Debt Relief Restrictions Order ranging from 2 to 15 years.

FAQ's - Debt Relief Order (DRO)

Here are some commonly asked questions regarding Debt Relief Orders. If you have any further inquiries, please don't hesitate to contact us, and we'll be happy to assist you.