DRO

What is a Debt Relief Order (DRO)?

A Debt Relief Order (DRO) is a formal insolvency solution for people with low income, minimal assets and total debts of £50,000 or less. It's administered by the Insolvency Service and available in England, Wales and Northern Ireland. Once approved, creditors included in the order can't take action to recover the debt, and qualifying debt is written off after 12 months if your financial situation hasn't improved.

How a DRO works

You apply through an approved DRO intermediary, who assesses your eligibility and submits the application to the Insolvency Service — you can't apply for a DRO directly yourself. There's no application fee. If approved, your included debts are frozen for a 12-month moratorium period, after which they're written off automatically unless your circumstances have changed significantly.

Benefits of a Debt Relief Order

• Debt write-off after 12 months— If your situation hasn't improved, debts included in the DRO are legally written off.
• Legal protection— Creditors can't chase you or take action for included debts.
• No cost to apply— There's no application fee.
• No ongoing payments— If you meet the eligibility criteria throughout the 12 months, you don't need to make monthly repayments.

Things to consider

• Strict eligibility — Your debt, income and assets all have to stay within set limits throughout the 12-month period.
• Credit file impact— Recorded for six years, and listed on the public Individual Insolvency Register while it's in place.
• Can be revoked— If your income or assets increase significantly — for example a pay rise or inheritance — your DRO can be cancelled and you'd become responsible for the debt again.
• Restrictions— You can't act as a company director or borrow more than £500 without disclosing your DRO.
• Not all debts qualify— Court fines, child maintenance, student loans and secured debts can't be included.

Who a DRO is for

• Debt level — £50,000 or less.
• Disposable income — £75 or less per month after essential living costs.
• Assets — Worth £2,000 or less, excluding a vehicle worth up to £4,000.
• Homeownership — You must not own a home.
• History — You must live in England, Wales or Northern Ireland and not have had a DRO in the past six years.

Speak to an experienced debt advisor

Everyone's situation is different, and the right debt solution depends on yours. Speak to one of our advisors for free, impartial advice on whether a DRO — or another solution — could work for you.