Debt Relief Order

A debt relief order, also known as DRO, is an order granted by the Insolvency Service. It can help if you are struggling or unable to pay your debts and live in England & Wales. 

Avoid going to court and stop all creditor hassle.

A DRO is a cheaper and quicker to set up than bankruptcy. If you are on a low income and can't afford bankruptcy it could be an option for you.

Let us assess your financial situation and see if it's the right plan for you.

Applications for a Debt Relief Order can only be made through a government approved intermediary such as the CAB. Debt Relief Orders are not suitable for everyone. Before applying for a Debt Relief Order speak to a debt advisor from Debt Advisory Line.

Evidence of entering into an Individual Voluntary Arrangement, a Debt Relief Order or a Protected Trust Deed will be entered on a public register.

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Benefits

  • Stop creditor letters & prevent lenders from enforcement action.
  • Write off unsecured debts within a debt relief order, usually after 12 months.
  • Doesn't involve going to court.

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What is a Debt Relief Order (DRO)?

A debt relief order, also known as DRO, is an order granted by the Insolvency Service. It can help if you are struggling or unable to pay your debts and live in England & Wales. 

An alternative to bankruptcy if you are on a low income

A debt relief order could be an alternative to bankruptcy, if you are on a very low income and have no more than £300 worth of assets. A DRO is Cheaper than bankruptcy and doesn't involve going to court. We should advise that there is no official scheme called a 'debt settlement order'.

Debt Relief Orders are not suitable for everyone. Before applying for a Debt Relief Order speak to a debt advisor from Debt Advisory Line who will assess your financial situation and recommend a suitable debt plan.

 

How a Debt Relief Order (DRO) Works?

A debt relief order will be issued and is administered by an Official Receiver (OR). During a 'Moratorium' period which usually lasts 12 months your creditors can take no enforcement action against you to reclaim debts. Once the order is made the OR will inform all your creditors of this for you. In addition:

  • The OR will also investigate whether you have made any transactions at below the value that would be expected (selling assets for less value than their value)
  • You will have a duty to co-operate with the OR.  This includes keeping records, and informing the OR of any changes in your income or new assets, (including windfalls, money left in a will and any lump sum). If you fail to do this then your order could be revoked and you would then need to start repaying your debts back.
  • Your bank account will not be frozen, but if you have an overdraft you may need to set up a new basic bank account as it is unlikely that your bank will allow you to continue.
  • A Debt Relief Order does not automatically freeze interest and charges however these will be written off on your discharge
  • The Official Receiver may decline your Debt Relief Order application. (They will advise you of the reasons).
  • Creditors can object to a Debt Relief Order.
  • If the OR feels your behaviour has been dishonest or your conduct poor during the Debt Relief Order period, then the court has power to make a Debt Relief Restriction Order (DRRO) against you. The restrictions of which could last up to 15 years.


What are the advantages of a debt relief order?

 

  • Once we have reviewed your finances we may recommend a debt relief order as the best debt plan for you. The Advantages are:
  • All unsecured debts included in the DRO will be cleared (written off) after 12 months.
  • Repay only what you can afford.
  • Quicker to set up than bankruptcy.
  • A DRO is Cheaper than bankruptcy and doesn't involve going to court
  • Stop all creditor phone calls and letters and prevent your lenders from enforcement action.
  • You become in control of your debts without a loan


What are the dis-advantages of a debt relief order

The effects of a DRO are similar to bankruptcy:

  • Your DRO will remain on public record for 15 months (or 3 months after your discharge) and your credit record for 6 years.
  • You may not be involved with a limited company or act as a director without court permission
  • You must continue to repay priority debts such as household bills and any secured loans.
  • You may not be able to obtain credit during the DRO and may have to return any goods bought with hire purchase or a conditional sale agreement.
  • You could have problems securing credit in the medium to longer term
  • If you can get credit over £500 you must tell the lender you have a DRO
  • You may also be unable to practice certain professions.

 

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Debt Relief Order (DRO) FAQ's

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