| Debt Relief Order |
 What is a Debt Relief Order (DRO)?
Debt Relief Orders are designed to give those who have debts of £15,000 or less, assets of less than £300 and surplus income of less than £50 per month the opportunity to apply for an order that will lead to the debts being discharged after one year.
During that period, people who have a debt relief order will be protected from enforcement action by their creditors and will be subject to similar restrictions to bankruptcy. Those whose financial circumstances improve during the order will be expected to make arrangements to repay their creditors, and there will be civil and criminal penalties for those who abuse the system.
It will only be possible to obtain a debt relief order by applying to the official receiver through an approved intermediary and The Insolvency Service has set up a working group comprising representatives from the advice sector to look at the detail of how this will work.
We’re here to help you
At Whittaker Bell we can assist you in deciding whether or not this is right option for you based on a free consultation and a review of your debts and Income and Expenditure.
If you owe more than £15k or know that you can afford more than £50 a month (see penalties for abusing the system in disadvantages below), it may be advisable to seek advice on other debt solutions such as Debt Management or an Individual Voluntary Arrangement.
Advantages of Debt Relief Orders
Manageable Payment – You will be asked to make manageable payments of £50 or less each month based on your financial statement of income minus essential living costs.
Protection from creditor contact – People who have a debt relief order will be protected from enforcement action by their creditors and will be subject to similar restrictions to bankruptcy
Write off remaining debt – Any remaining debt that isn't paid under the order will be written off
No Bankruptcy fees – Declaring yourself bankrupt can often cost you in the region of £470. This cost does not apply in a Debt Relief Order.
Disadvantages of Debt Relief Orders
High Debt level – A Debt Relief Order is only applicable where the unsecured debt level is less than £15k
Assets – A Debt Relief Order is not applicable for people who have assets valued over £300. This can include your car or any savings, so effectively rules alot of people out of this solution.
Change in circumstances– People with Debt Relief Orders whose financial circumstances improve during the order will be expected to make arrangements to repay their creditors, and there will be civil and criminal penalties for those who abuse the system.
Location, Location, Location – Debt Relief Orders are only available to debtors in England and Wales and not to debtors in Scotland
Restrictions Apply to existing arrangements – Debt Relief Orders are not applicable if you have an existing Bankruptcy Order, Bankruptcy Restrictions Order or Individual Voluntary Arrangement or have had a Debt Relief Order in the last six years.
For a no obligation telephone consultation, call us FREE on 0800 622 6480
Debt relief orders (DRO) can be obtained in England and Wales. For further Debt Help and advice contact one of our debt help speacialists on the freephone number above.
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