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Debt Relief Orders

Low income and no assets? A DRO could be right for you.

To be eligible for a Debt Relief Order (DRO) you must meet a certain critieria and not be involved in any other insolvency procedure. Debt Release Direct can help you decide whether this is an appropriate situation for you.

Setting up a DRO is done online by an authorised debt advisor. This information is sent to the Official Receiver. You will have to tell the Official Receiver if you paid some creditors but not others and if you have given away or sold any assets for less than they were worth in the last two years, preceding you DRO application

How DROs work

Once the application has been made and the Official Receiver has approved it you will be required to give them any information they ask for about your finances. They will explain the restrictions that you must abide by. They will also contact your creditors and informat them that they must not contact you to make payments to them. If any creditor does contact you or you make a pyament to them you must tell the Official Received straight away. If your income increases you must tell the Official Receiver and he may allow you an extension of up to three months to agree with your creditors how to repay them.

If your circumstances haven’t improved when your DRO comes to an end, the debts listed within it will be written off. However, your creditors can apply to the OR to extend your DRO, and/or the restrictions that have been placed on you, beyond the initial 12 month period.

During the DRO, you must cooperate with the OR at all times. If your circumstances improve enough for you to start repaying your creditors, they’ll consider whether or not to terminate the order. Should this happen, you’ll have to start repaying your debts.

If your circumstances change towards the end of your DRO, the OR can extend it by up to three months. This gives you some breathing space to agree with your creditors how you’ll repay your debts. During this time, you’ll still have legal protection from them. But you’ll also still be under the restrictions placed on you at the start of the DRO.

Qualifying for a DRO


The Government has set very strict criteria around who can qualify for a DRO. It may be a suitable option if you:

  • You must not owe more than £20,000
  • You have less than £50 to spend each month, after paying tax, national insurance, and normal household expenses.
  • You have lived or worked in England or Wales in the last 3 years.
  • You don't own any assets over the value of £1000 in total.
  • You have not been in a Debt Relief Order in the last 6 years
  • You cannot already be in any other formal insolvency procedure but if a creditor has applied for your bankruptcy you can ask them to allow you to apply for a Debt Relief Order


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Some advantages and disadvantages of a DRO

Advantages

Disadvantages

  • Your creditors are legally bound not to pursue your debts during the DRO
  • If your circumstances don’t improve after 12 months, your debts will be discharged
  • The eligibility criteria are very strict
  • You’ll have to pay court fees
  • During the DRO, you’ll have to comply with certain restrictions
  • Your creditors can ask the OR to extend the term of your DRO and/or restrictions
  • The DRO will stay on your credit file for at least six years after its start date

Debt Release Direct are here to help

At Debt Release Direct, our qualified advisers are here to help you find the best solution to dealing with your debts. We’ll take the time to talk through your individual circumstances and, if we think you’re eligible for a DRO, we’ll give you all the information you need before helping you with your application.

Our aim is to give you honest, professional debt advice. So if we think a different debt solution would be more suitable for you, you can trust us to let you know.

Contact us today

Call us today on 0800 019 7465 to speak to a member of our friendly team, or fill in the contact form below.

Feel bad about borrowing?

Step into the Government’s shoes for a moment. In January 2014, public sector net borrowing was £4,718 MILLION, meaning the Government repaid an average of £157m every day of that month. That’s equal to £1,820 a second. And whilst these figures make the average personal debt pale into insignificance, they don’t make living with debt any easier. Give Debt Release Direct a call today and take your first step to managing your debts.

Could a DRO be your second chance

If you qualify for a DRO and we think it’s a suitable option for you, then it could be the best second chance you’ll ever get. With 12 months’ legal protection from your creditors, a DRO offers a genuine opportunity for you to get your life back on track.

And with help and support from Debt Release Direct, you’ll hopefully gain the financial awareness you need to stay in control of your finances in the future.

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