Debt Relief Order (DRO)
A Debt Relief Order (DRO) is a way of dealing with your debts if you can’t afford to pay them. It means you don’t have to pay certain kinds of debt for a specified period (usually 12 months).
At the end of the DRO period, the debts included in it will be written off (‘discharged’) and you won’t have to pay them.
If you obtained any of your debts through fraud, you will have to restart paying them when the DRO has ended.
If your circumstances change so that you are able to pay some or all of your debts, your DRO may be revoked so you can arrange to pay your creditors (the people or companies you owe money to).
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To be eligible for a DRO, you must meet these criteria:
You won’t be eligible if you are involved in bankruptcy proceedings or any other formal insolvency procedure. However, if one of your creditors has asked a court to make you bankrupt, you may ask the creditor for permission to apply for a DRO instead.
Below you can view a list of Frequently Asked Questions
Simply complete the form to see if you qualify for any of the available debt solutions.
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A debt relief order (DRO) is an insolvency procedure to deal with unmanageable debt if you owe less than £30,000 and meet other criteria.
A DRO freezes your debt repayments and interest for 12 months. If your financial situation has not changed at the end of this period, then all the debts included will be written off.
A debt relief order can be considered a low-cost alternative to bankruptcy however, to apply you must meet certain criteria:
To apply online for a DRO, an individual must go through an intermediary. This third party is considered an approved debt adviser who has permission to offer advice regarding a DRO and complete relevant documents.
DROs are administered by the Insolvency Service’s Official Receiver. To locate an intermediary, contact an authority listed on the Insolvency Service website or a local Citizens Advice Bureau.
You will need to pay the Insolvency Service a one-off fee of £90. You can’t get any discounts so the full £90 needs to be paid before your application can be submitted.
The fee can be paid in one lump sum or, if you live in England or Wales, in instalments over a six-month period. Once your fee has been paid and your application is submitted, you cannot get your money back, even if the DRO is rejected or revoked.
If you are in a DRO then your creditors can’t pursue you for your debts during the 12 month period. Once the DRO is complete, the debt will be written off and you will no longer be liable.
What debts can be included in a DRO?
The following are considered debts by a DRO: credit card balances, overdrafts, loans, conditional sale agreements, buy now but pay later agreements, hire purchase agreements, rent, utilities expenses, telephone charges, Council tax, Benefit overpayments, and Social fund loans.
Be aware that goods obtained through hire purchase or conditional sale agreements might have to be returned.
Possibly, because a note regarding the DRO will be placed on your credit file for six years. Therefore, you may find it difficult to obtain additional credit or open a bank account during this time.
A DRO will stay on your credit file for six years from the date it is approved. You are not allowed to take out credit during the twelve-month term however you may also find it difficult until five years after the DRO has been completed.