What is a Debt Relief Order?

A Debt Relief Order (DRO) is a new debt solution that was introduced on April 6th 2009.

It is an alternative to bankruptcy aimed at helping people who are unable to turn to other debt solutions.

Do I qualify for a Debt Relief Order?

To qualify for a Debt Relief Order, you must meet the following criteria:

• You are unable to repay your debts
• Your total debt amounts to less than £15,000
• Your total assets are worth £300 or less
(although your car may be worth up to £1,000)
• Your disposable income (after normal household expenses) is no more than £50 per month
• You have lived in England or Wales at some point in the last three years
• You have not been subject to another Debt Relief Order in the last six years
• You are not involved in any stage of another insolvency procedure (e.g. bankruptcy or an IVA (Individual Voluntary Arrangement)) at the time of application.

How will a Debt Relief Order help me?

While your DRO is in force, you will be protected from any court action by your creditors. Like regular bankruptcy, you will be legally debt-free at the end of proceedings, which usually last 12 months.

Some things to consider

For the duration of your DRO, you will be subject to some restrictions - for example, you will be unable to obtain credit of £500 or more without telling the lender that you are subject to a Debt Relief Order.

Furthermore, a Debt Relief Order will show on your credit history, and will usually remain there for six years. This means that although your DRO proceedings may come to an end after one year, you will still have difficulty obtaining further credit for five more years.

Tags: debt, debt relief, debt relief order, debt relief orders

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