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:

• you owe £50,000 or less
• do not have enough money left at the end of the month to make your debt repayments
• you’ve lived or worked in England or Wales in the last 3 years
• have savings or valuable items worth less than £2,000 in total
• own a vehicle worth less than £4,000 (if you were to sell it today)
• are not currently bankrupt, have an interim order or an individual voluntary arrangement
• you’ve not had a DRO in the last 6 years

A debt adviser will check if you meet the eligibility criteria – free of charge.

They will assess your situation and look at your income, debts, and belongings.

Do not worry if you do not know exactly what you owe or what your monthly expenses are. The debt adviser will help you figure this out.

Organisations who can help you get a DRO

• National Debtline
• Citizens Advice
• AdviceUK
• Payplan
• Christians Against Poverty
• Community Money Advice
• Shelter (England)
• Shelter (Wales)
• MoneyPlus Advice
• Money Wellness

You do not need to pay for a DRO – there’s no application fee.

Creditors listed in your DRO cannot ask you to make payments during the DRO period. They can send you statements and general correspondence.

If a creditor asks you for payment, tell them about your DRO and speak with your debt adviser.

Possibly, because if your application is successful, your DRO will also be added to your credit reference file.

It will usually show on your credit reference file for 6 years.

This is the standard amount of time that debt relief options and notices show on creditor reference files. For example, if you missed a repayment to a creditor (default notice) it would usually show on your creditor reference file for 6 years.

Once you get your DRO, you stop making payments towards the debts listed in it.

A DRO lasts 12 months. This is called the DRO period. The DRO period can be extended in some cases.

At the end of the period, your DRO is closed and you will not have to pay your debts back.

You do have to keep paying any regular commitments during the DRO period, like rent and bills.

Debts that can be included in a DRO are called ‘qualifying debts’.

They include:

• credit cards, overdrafts and loans
• rent arrears and utilities (gas, electricity, telephone)
• council and income tax
• buy now – pay later agreements
• benefit overpayments
• debts to friends and family

Once your DRO is approved, you will no longer have to pay the debts (and interest) listed in the DRO anymore.

There are some types of debts that cannot be included in a DRO. You’ll still have to pay:

• child maintenance or anything you owe under family proceedings
• student loans
• budgeting and crisis loans from the Social Fund
• debts secured against any possessions you own
• damages for personal injury or death a court has ordered you to pay
• unpaid TV licence fees

Once you are granted a DRO, you will have to follow certain restrictions during the DRO period.

If you apply for an overdraft or a new account you must tell the bank or building society about your DRO.

You cannot:

• borrow more than £500 without telling the lender about your DRO – whether you’re borrowing on your own or with someone else
• write cheques when you do not have sufficient funds
• apply for another DRO for 6 years from the date your DRO is approved

You will not be able to:

• act as a director of a company
• create, manage or promote a company without the court’s permission
• manage a business with a different name without telling anyone you do business with about your DRO

At the end of your DRO period, the restrictions end, and you will not have to pay the debts (and interest) listed in the DRO.

You can check the date your DRO ends using the Individual Insolvency Register.