What is a Debt Relief Order?
Available since 6th April 2009 a Debt Relief Order or (DRO) is a form of insolvency and as such is administered by the Official Receiver
These types of Debt Solutions
are intended for use by people that have under £15000.00
of unsecured debts, limited income and very few assets. Only if an applicant meets numerous requirements will they be put on a (DRO) as an alternative to an IVA
, Trust Deeds
How does a Debt Relief Order Work
To apply for a debt relief order you need to contact an authorised adviser whose job it will be to check you meet the strict criteria before making the application for the order on your behalf. Whilst the process of applying for an order is not free, they are seen as cheaper alternative to Bankruptcy
and can be paid for in instalments over a 6 month period.
You cannot add new debts to an existing debt relief order or debts that you simply forgot about, so it is very important that you remember your application can only be completed by the official receiver once they have received all the information required and your payment in full. In addition, if you are already involved in any other formal insolvency procedures such as; bankruptcy or an IVA you cannot apply for a (DRO).
During the period of your debt relief order usually 12 months, you will not need to make any repayments towards your unsecured debts listed in the order. In addition your unsecured creditors with whom you have the listed debts won't be able to take any further action against you and once your debt relief order has ended all of the debts included in the order are legally written off.
It is however important to remember that a (DRO) is not the same as bankruptcy and that you will still need to make contracted repayments to any debts not included in the order as well as your normal household expenses such as; rent, council tax, gas, water and electricity bills. You will also be required to advise the Official Receiver
about any new debts incurred during the period of the order.
Do I qualify for a Debt Relief Order?
As discussed the criteria for a DRO is strict with official figures suggesting only 11% of recent bankruptcy cases would qualify under the existing requirements. These are as follows;
- Applicants must have debts under £15000.00 and very limited income
- Applicants must not have assets or savings of over £300.00
- Applicants must not own a vehicle worth more than £1000.00
- Applicants must not have a private pension fund worth over £300.00
In addition, only certain types of debt can be included in the Debt Relief Order these include; Credit cards, overdrafts, personal loans, rent, utilities or council tax arrears and hire purchase agreements.
To get further debt-help.php with debt relief orders or alternative solutions such as a debt-management.php plan or an iva.php don’t hesitate to call one of our trained debt planners for more information. Call us directly on 0161 8500138
or Apply Online
Please remember repaying debts over a longer period can increase the total amount repaid and may affect your ability to obtain further credit in the future. Fees will be payable for all services provided in relation to all the debt solution detailed on this site.
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