Debt Relief Order (DRO)
A DRO is a formal debt solution that lasts 12 months. A DRO is only available subject to strict criteria being met. We recommend people consider their eligibility for a DRO before applying for an IVA.
How much debt do you have?
How it works
Your personal debt circumstances will be assessed by an advisor, including your total assets and your disposable income.
You will only qualify for a DRO if all of the following apply:
- You have a monthly disposable income of £75 or less
- Your assets are worth no more than £2,000
- If you own a vehicle, it is valued at no more than £4,000
- Your unsecured debt level is no more than £50,000
If you are applying for a DRO, your application will need to be submitted through an 'Approved Intermediary' — a company registered with the Insolvency Service to provide the solution.
A DRO is in place for 12 months during which time, you are not expected to make payments on your unsecured debts. You are legally protected against your creditors who will not be able to take any action against you during this time.
Providing you continue to meet the qualifying criteria, a DRO is complete after 12 months and all debts that were included in it will be written off.
A DRO is only available in England and Wales.
Advantages
No monthly repayments
If a DRO is successful there is no up front fee.
Unsecured debts written off after 12 months
Your debts will be written off after 12 months, provided you continue to meet the DRO qualifying criteria.
Legal protection from creditors
You are legally protected with a Debt Relief Order.
Disadvantages
Not available to home owners
You cannot apply for a DRO if you own a home.
Added to the Individual Insolvency Register
Your DRO will be added to the Individual Insolvency Register. This will be removed 3 months after the DRO end period.
It will affect your credit score
A DRO will remain on your credit file for 6 years from the date it is approved.