Debt Relief Order

A Debt Relief Order (DRO) is a cheaper alternative to bankruptcy. You can only get a DRO if you meet the following criteria:

• You owe less than £50,000 in total,
• If you own a car, it must be worth less than £4,000,
• You do not own anything else that could be sold for more than £2,000,
• You have less than £75 left each month after your essential expenses are paid,
• You have lived or worked in England or Wales for the last three years, and
• You haven’t applied for a DRO in the last six years.

There is no fee to pay for a DRO. To apply for a DRO, you will need to speak to an ‘Approved Intermediary’. You will find an Approved Intermediary through most local Citizens Advice.

Once a DRO is in place you will not have to pay anything to your creditors for one year. During this year your creditors are not allowed to ask you to pay any money to your debts. At the end of the year your debts will be written off if you still meet the qualifying criteria.

If you no longer fit the qualifying criteria at the end of the 12 months, you will have to start paying the debts again.

Important points to remember about a DRO:

• A DRO would give you a 12-month break from payments and your creditors. After this, your debts would be written off.
• A DRO will appear on your credit reference file for six years. This means getting credit will be harder in the future.
• Not all debt can be added into a DRO. Please visit this Gov.UK page here for more information on debts that cannot be included.