How to get a Debt Relief Order (DRO)

If you`re unable to pay your debts, it may be that a Debt Relief Order (DRO) could help. Introduced on April 6<sup>th</sup> 2009, it`s a new form of insolvency that aims to free people from their debts - as long as they:

• Can`t pay their debts,
• Owe a total of £15,000 or less,
• Don`t own assets worth more than £300 in total (excluding a car, which may be worth up to £1,000),
• Have a monthly disposable income of £50 or less, and
• Live in England or Wales (or have lived / worked there at some point in the last 3 years)

If all of these points apply to you, a DRO may be appropriate for you. Basically, this would prevent any lender included in your DRO from taking any action against you (unless they have the permission of the court) for the next 12 months.

Assuming your circumstances had not changed significantly, all debts listed in the DRO would be discharged when that period was over - you would be free from those debts.

How do I get a Debt Relief Order?

To get a DRO, you would need to apply though a debt adviser known as an `approved intermediary`, who is authorised (by a `competent authority`) to provide advice on DROs. They would decide whether or not a DRO was the right kind of debt relief for you.

If it was, you would pay the official receiver £90 for your application to be considered. The intermediary might help you complete the form, or they might set up the application and leave the form to you to fill in.

The intermediary would submit the application electronically, printing out a copy for you to sign. When the official receiver considered your application, they might accept it, reject it, or request more information.

What would happen if the DRO was accepted?

If the official receiver accepted the DRO, they would:

• Notify you of the making of the DRO and provide details of the `duties imposed on you` while the DRO was in force,
• Notify all the lenders whose debts were included in the DRO, and
• Enter your details in the Electronic Individual Insolvency Register (EIIR), noting that a DRO had been made against you.

While the DRO was in force, you must not make any payments to a lender included in the DRO - but you must keep on paying your rent, utility bills and other ongoing commitments. Please note that you would be responsible for any debts you incur after the DRO has been approved.

You would be subject to the same restrictions as a bankrupt, and you would be required to provide the official receiver with any information they requested.

At the end of the DRO, all the debts listed in it would be discharged and you would be free from them.

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