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.
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.