Bankruptcy

DEBT RELIEF ORDER (DRO)

A debt relief order is only available to individuals who have very little disposable income available to pay to their creditors, have few or no assets, and a limited level of debt. If you are eligible for a DRO we can help you with the application.

You may be eligible for a Debt Relief Order if you owe less than £20,000 in total to your creditors, you have £50 or less left over each month after your essential bills and outgoings have been paid, your car (if you have one) is worth less than £1000 and your other assets don’t exceed a value of £1000.

A DRO will last for 1 year, and once your DRO has ended you are released from your debts (with certain exceptions).

We are able to process a DRO application for you, free of charge, but you will need to pay a fee of £90 to the Insolvency Service (the government) for the application to be reviewed and accepted.

Advantages

  • You will not need to make any monthly payments to your debts
  • Your debts will be written off at the end of the DRO.
  • None of the creditors listed in the DRO application can take further action against you without the court’s permission.
  • The fee (£90) is affordable and can be paid in instalments but the fee must be paid before the application can be made.
  • You will keep your assets and a vehicle as detailed above.
  • Our trained staff, known as Approved Intermediaries, will ensure that you meet the criteria for a DRO and guide you through the process

Disadvantages

  • Your DRO is entered on a public register.
  • Your DRO will remain on your credit file for 6 years.
  • You can’t have a DRO if you have an existing bankruptcy order, an IVA, are subject to bankruptcy restrictions, or you have had a DRO in the last 6 years.
  • You will remain liable to pay certain debts – in particular:
    • student loans;
    • fines;
    • debts arising from family proceedings; and
    • budgeting loans and crisis loans owed to the Social Fund.
  • Your employment may be affected.
  • Your DRO could be revoked (withdrawn) if you don’t co-operate with the official receiver during the year that your DRO is in force.
  • You can’t act as a director of a company or be involved in its management unless the court agrees.
  • You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to a DRO.
  • You may have a debt relief restrictions order* made against you for 2 to 15 years if you acted irresponsibly, recklessly or dishonestly.
  • You can’t have a DRO if you own your own home. Even if you have negative equity.

* An order that will place restrictions similar to those in force while subject to a DRO, which the official receiver may apply for.