Debt Relief Orders - DRO

What is a Debt Relief Order?

Debt Relief Orders were introduced on 6th April 2009 and they are designed to be an alternative to bankruptcy for people with a moderate debt - but a minimal disposable income.

They are available to anyone who is a resident of England or Wales with a debt of less than £20,000, or a resident of Northern Ireland with a debt of less than £15,000, and who cannot afford to repay any more than £50 per month to their creditors.

Debt Relief Orders last for 12 months and they remove the obligation from the debtor to make debt repayments. Once you are subject to a Debt Relief Order you do not repay anymore of your debt.

There are some qualifying criteria for the Debt Relief Order, without which an Order cannot be obtained.

These are:

  • You cannot be a homeowner
  • Have a total debt level below £20,000 if resident in England or Wales
    (Or, have a total debt level below £15,000 if resident in Northern Ireland).
  • You must be unable to repay your debts to the normal schedule.
  • Have assets with a total value below £1,000 if resident in England or Wales.
    (Or, have assets with a total value below £300 if resident in Northern Ireland).
  • Do not own a vehicle with a value of more than £1,000
  • Must have a disposable income of less than £50 per month.
  • You must be a resident of England, Wales or Northern Ireland, or have had a business here or living here for 3 years.

The Debt Relief Order is aimed at helping the most financially challenged people in the UK, those that can't even afford the cost of making themselves bankrupt.

This has been created to simplify the insolvency procedure for those people who have very little asset worth, to whom the cost of bankruptcy is prohibitive.

Instead, for an application fee of £90, they can now apply for the Debt Relief Order and achieve the same result, debt freedom after 12 months. That is unless they are the beneficiary of an unexpected windfall whilst subject to the Order.

Creditors also have the same rights of redress as bankruptcy too, should they feel the debtor has behaved in a fraudulent manner.

There are only a few select intermediaries through which a Debt Relief Order can be applied for. For further information on applying for a Debt Relief Order contact your local Citizens Advice Bureau.

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