Debt Relief Order (DRO)

Debt Relief Order (DRO)

Wondering if you can get a debt relief order, sometimes referred to as DRO?

This section explains exactly what a debt relief order is.

Check if a debt relief order is the right solution to deal with your problem debts.

Find out the steps you need to take to apply for a debt relief order.

Then use our FAST, FREE Online Assessment to see if you can be debt free in 2023!

What Is A Debt Relief Order?

A Debt Relief Order is an order you can apply for if you can't afford to pay off your debts. Often shortened down to DRO, it is a solution that is a simple, quick and cheap alternative to bankruptcy in the United Kingdom.

It is suitable for anybody that is struggling with their debts who have few or no assets (less than £2000 and not homeowners) and little disposable income after you have paid all of your living costs and share of household bills (less than £75 per month).

If you qualify for this solution and your application is successful then your repayments and interest will be frozen for 12 months. If your financial situation doesn't change then the debts will be written off after the 12 months are up.

Not all debts can go into a DRO. Things that can be included are: overdrafts, loans, credit cards, rent arrears, utility bills, council tax arrears, benefits overpayments and business debts.

Debts that aren’t covered include: student loans, magistrates court fines, confiscation orders (fines relating to criminal activity), child support and maintenance, social fund loans, and debts resulting from certain personal injury claims against you.

Steps to apply for a Debt Relief Order

• Step 1: Check you qualify.
• Step 2: Make it is the right option for you.
• Step 3: Complete your application.
• Step 4: Pay the £90 application fee.
• Step 5: Apply to the Insolvency Service.
• Step 6: Receive your Moratorium.

Step 1: Check you qualify for a debt relief order (DRO)

You can apply for a DRO in England and Wales providing:

• You owe less than £30,000
• You have less than £75 a month spare income per month (after paying all your living costs)
• You do not own your own home
• You have less than £2000 in assets
• You do not own a vehicle worth more than £2000
• You have not made an application within the last 6 years

You can apply in Northern Ireland providing:

• You owe less than £20,000
• You have less than £50 a month spare income per month (after paying all your living costs)
• You do not own your own home
• You have less than £100 in assets
• You do not own a vehicle worth more than £1000
• You have not made an application within the last 6 years

Step 2: Make sure a DRO is the right option

As well as meeting the above criteria, in order to apply you must also:

• Contact a Money Advisor to run through your income and expenditure to check you meet the strict criteria.

If you haven't already received advice from us and are considering a debt relief order, you can use our online debt test tool, which will provide you with a free and confidential assessment of whether you qualify for a debt relief order. We'll also send you our "Get Out Of Debt" guide by email.

Or, if you’d prefer to speak to us, call our FREE Helpline on 0800 368 8286 (freephone, including all mobiles).

Step 3: Complete your Application

Once your money advisor has worked through your situation, and put together your budget. They will send you the application form for you to sign, this is known as the DRO declaration

You will then need to prove your income by supplying your wages slips or bank statements if you receive benefits. You also need to get a list of your account or reference numbers for each one of your debts.

Step 4: Pay the £90 application fee

Before your application is submitted you will need to pay a £90 fee to the Insolvency Service. This can be paid in installments, but your application will not be put forward until the full amount has been paid. Once paid, the fee is non-refundable, whether the Insolvency Service approves or rejects your application.

In some cases a charity may be able to help you with the cost, you can ask your money advisor.

Step 5: Apply to the Insolvency Service

Your completed application and fee will be sent to the Insolvency Service, they will then check everything and decide wether to grant your DRO order.

Step 6: Receive your Moratorium

The Insolvency Service will confirm in writing to you within 10 days, as to whether your DRO has been granted. If your application has been successful your DRO will start from the date of the order. The main effect of a DRO will be to place a ‘moratorium’ period on the debts listed in your DRO. This means that your creditors cannot take any action to recover or enforce their debts against you during this period.

The moratorium usually lasts for 12 months from the date of the order, although there may be exceptions, and after that time the listed debts will be discharged.

If you are told that your DRO application has been unsuccessful, please call us on
0800 368 8286

• Last updated 02 January 2023