A debt relief order
– What is a debt relief order?

A debt relief order (DRO) is a suitable and more affordable alternative to bankruptcy for those who are on a low income and have debt of less than £15,000.

A debt review order lasts for a period of 1 year (12 months) and within this period your creditors – the people you owe money to can not chase or take action against you for payment.

Once the 1 year period has expired all the debts listed within the order will be wiped clean.

Debt Relief limitations

There are certain limitations which will prevent you from obtaining a debt relief order such as:

• If you have assets, valuables or saving above the value of £3000.00.
• You own a car or vehicle that is worth £1000 or more.
• You have a private pension fund that is worth £300 or more.

Applying for a Debt Relief Order

If you wish to apply for a debt relief order then you will be required to speak to an authorised DRO advisor who will check that you meet the specified requirements for the DRO. The cost of the order is £90.00 however this may be paid over a 6 month period in monthly instalments.

Can I apply for a debt relief order?

There are certain restrictions and requirements that you will need to meet in order to successfully apply for a debt relief order.

Such as:

• You must have debts of less than £15,000 and that they qualify as debts for the DRO.
• You have an available income of £50 or less per month after your normal expenditures.
• Any assets, valuables or things that you own must be worth less than £300. Or £1000 for a car or motor vehicle.
• You must have over the past 3 years been a resident at a property in England and Wales.

What types of debts can be added to a debt relief order?

There are certain qualifying debts that can be added to the debt relief order such as:

• Credit card and store card debts.
• Bank overdraft debts and arrears.
• Household utilities bills and debts, gas, electric, council tax, water rates, telephone bills.
• Hire purchase (HP) and buy later agreements and loans.

What type of debts can not be added to the order?

There are certain debts that can not be protected and covered by the order such as:

• Any fines or expenses relating to criminal actives such as court fees etc.
• Any student loans or grants.
• Any overpayments in child maintenance and benefits payments.

What will stop me from getting a debt relief order?

You will not be able to apply for the debt relief order if any of the conditions apply below:

• You have an IVA or you are applying for an IVA (Individual Voluntary Agreement).
• You have been made bankrupt or in bankruptcy proceedings.
• You have been granted a debt relief order within the last 6 months.
• You have been given a debt relief restriction order or undertaking.

Further Debt Advice

A debt relief order may not be suitable for you and there may be other options to explore. Please contact us for further advice on the type of debt solutions that may be suitable for you.

Best Wishes, Susan.

What are the next steps to take?