A debt relief order (DRO) is a formal debt relief option to help repay your debts if you have few assets and a low debt level. DROs were designed specifically for those with less than £20,000 worth of debt, less than £1,000 in assets (including your car), and less than £50 spare income after paying for your essentials.
If successful, all payments will be frozen for 12 months in order for you to improve your financial situation; if not, your debts will be written after this time.
Please Note: Debt Assist UK only provide debt advice; we do not directly provide any financial solutions ourselves. We will talk you through your available options and if appropriate, we can offer you a no-obligation referral to a regulated debt solution provider, from whom we may receive a referral fee. Some debt solutions involve fees to you – these fees may differ based on the circumstances of your individual situation, but will always be explained to you by your chosen solution provider in writing before you decide to take up their service(s).
Pros of a Debt Relief Order
- You are usually discharged from your debts after 12 months.
- Can be a ‘low-cost bankruptcy’.
- Creditors must stop chasing you for payment.
Cons of Debt Relief Order
- Restricts your future borrowing.
- Not applicable for home owners.
- Can no longer be the director of a company.
- May have to tell your bank or building society when opening a new account.
Some error has occured.
Debt Relief Order FAQs
If for any reason your application for a debt relief order is refused, you will be given a written reason properly explaining why. However, a few of the main reasons are:
- You don’t meet the criteria.
- It is believed you haven’t provided all of the information needed.
- You didn’t reply with necessary information when asked.
There are several situations in which a debt relief order can be stopped while currently in place, these include:
- An increase in you income. Leaving you with more than £50 per month after expenses.
- You left out information about debt, assets or income.
- You ignore any restrictions put in place.
- You lied in order to get the DRO.