A Debt Relief Order (DRO) is a formal debt solution designed to help individuals who cannot afford to repay their personal debts.
You must apply for a DRO through an approved debt adviser. To qualify, you must meet specific eligibility criteria relating to your total debts, assets, and disposable income.
A DRO usually lasts for 12 months. Once it is approved, you are not required to make payments towards the debts included in the order, and creditors cannot pursue you for payment or add interest and charges during this period. At the end of the 12 months, the debts listed in the DRO are written off.
A DRO will remain on your credit file for six years from the date it is approved, which is consistent with other forms of formal debt relief.
There is no charge for applying through an approved debt adviser. Your adviser will review your financial situation, including your income, debts, and assets, to confirm that you meet the eligibility criteria before submitting your application
You are eligible for a DRO if you:
- You owe £50,000 or less in total unsecured debts. (This includes credit cards, personal loans, overdrafts, rent arrears, utility arrears, etc.)
- You have £75 or less disposable income per month. (This means that after paying essential living costs, you have £75 or less left over.)
- You do not own assets worth more than £2,000 in total. (This includes savings, valuables, and any property you own.)
- You do not own a vehicle worth more than £4,000. (Unless it’s adapted for a disability, in which case the limit may not apply.)
- Have lived or worked in England and Wales in the last 3 years
- You live in England, Wales, or Northern Ireland. (DROs are not available in Scotland; the equivalent there is the Minimal Asset Process bankruptcy.)
- You have not had a DRO in the last 6 years.
If you do not live in England or Wales
You cannot apply for a DRO if you live in Scotland or Northern Ireland. Please speak with a debt adviser to find out what options are available to you.
We are not an approved organisation and we cannot help clients apply for a DRO, However you can gain further information from Money Helper by clicking here.
