Debt Relief Orders

What is a Debt Relief Order?

A Debt Relief Order (DRO) is a form of insolvency which is designed to help those who have relatively low debt, little surplus income and very few valuable assets.

A DRO will last for a total of 12 months in most cases,

during which, any creditor named on the order cannot take any action to recover their money unless they have the court’s permission.
after which, you will be freed of the debts included in the order (unless your circumstances have significantly improved).

DROs don’t involve the courts, and are run by The Insolvency Service in partnership with debt advisers known as ‘approved intermediaries’. The ‘approved intermediaries’ are the people who’ll actually assist you in applying to The Insolvency Service for a DRO.

Is a Debt Relief Order right for me?

A Debt Relief Order will certainly not be suitable for everyone due to the strict criteria involved. The Insolvency Service state that a DRO is suitable for people who don’t own their own home, however this isn’t the only condition.

You can only enter a DRO if you meet the following conditions:

You must be unable to pay your debts.
You must not owe more than £15,000.
The total value of your assets must not exceed £300 - although you can own a car worth up to £1,000.
Your disposable income (after tax, national insurance contributions and normal household expenses) must not exceed £50 per month.
You must live in England or Wales - or have lived / carried out business in England Wales at some time in the last 3 years.
You must not have been subject to another Debt Relief Order in the previous 6 years.
You must not be involved in another formal insolvency procedure at the time you apply.

How does a Debt Relief Order work?

During the Debt Relief Order period you will be protected from any enforcement action by creditors that are included in the application. This will typically last for a period of 12 months, however, a creditor can apply to the court to extend either the order or the restrictions placed on a debtor.

Throughout the life of the order you will be expected to co-operate with the official receiver and should your financial situation improve you will be expected to repay your creditors.

A number of restrictions will also be placed on a debtor during the life of the DRO (and in some cases, after the DRO has expired). These include:

The debtor must not obtain credit of £500 or more, without disclosing that they are subject to a DRO to the lender.
The debtor may not carry on a business (directly or indirectly) in a different name after being granted a DRO without telling all those with whom they do business with under the previous name.
The debtor may not be involved (directly or indirectly) with the promotion, management or formation of a limited company, and may not act as a company director, without the court’s permission.
The debtor will only be able to obtain a DRO once every six years.
These restrictions could be extended should the official receiver deem that the debtor has acted improperly or dishonestly. This extension could last for up to 15 years.

What if I don’t qualify for a Debt Relief Order?

If you don’t meet the conditions of a Debt Relief Order don’t panic.

There are a number of alternative debt solutions that can bring an end to the stress of spiralling debts, these include:

To find out more about your options in tackling your debt please either call us on FREEPHONE 0800 019 7465 or chat live NOW to a dedicated advisor.

What To Do Next - 3 Simple Steps

Step One

Call us for FREE on 0800 019 7465 to discuss your situation with a Debt Release Direct Advisor, and advise us how much you can afford to pay each month.

Step Two

Our advisors deal with your creditors and reach an agreed payment plan.

Step Three

You make one simple payment to Debt Release Direct each month, and then we’ll distribute this to your creditors.

Simple. Effective. Direct.

To make Debt Release Direct work for you, please call one of our friendly, professional advisors on 0800 019 7465 today, or fill in our online contact form for a free call back.