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Debt Relief Order Debt Solution

Summary: this paper looks at the debt solution known as a Debt Relief Order - a relatively new option for those who cannot afford to pay their debt back.

What is a Debt Relief Order (DRO)?

A DRO is a form of bankruptcy for debtors who meet certain criteria. It is less expensive and requires less paperwork than bankruptcy.

DRO criteria

To meet the requirements for a DRO:

  • You must be unable to pay your debts.
  • Your total debts must not be more than £15,000
  • Your total assets must not be more than £300.
  • Your disposable income after deducting all normal living expenses, must not be more than £50 per month.
  • You must be living in England or Wales, or at any time during the last 3 years have been resident or carrying on business in England or Wales.
  • You must not have been subject to a DRO within the last 6 years.
  • You must not be involved in any other formal insolvency procedure at the time of application for a DRO.
  • If you have presented a petition for your own bankruptcy and are awaiting a hearing date, you must have been referred to the DRO procedure by the court.
  • If you have been notified that a creditor has presented a bankruptcy petition against you, then you must get that creditor's permission to apply for a DRO.

How much will it cost?

The current fee for a DRO is £90. It must be paid to the official receiver, in full, before your application will be considered.

How to get advice and find an approved intermediary

You can only apply for a DRO through a skilled debt adviser - an 'approved intermediary' - who is approved to give advice on DROs by one of the competent authorities. The intermediary will decide whether a DRO is the best kind of debt relief for you. Intermediaries include the Citizens Advice Bureau.

The above is provided as information only. Iva.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.