Debt Relief Order
A debt solution for people on low income with debts they have little chance of ever repaying
All Debt Written-Off
All debts are cleared provided you remain within criteria for 12 months.
No Payments
You are not required to make any repayments during the DRO period of 12 months.
Full Legal Protection
Creditors may not chase you for payments.
Learn Your Eligibility Today
We'll tell you if you are suitable for a DRO.
What is a Debt Relief Order?
A Debt Relief Order (DRO) is a way to deal with your debts if you don’t own your home, don’t have much spare income and your debts are no more than £50,000.
Debt Relief Orders were introduced by Government for people who could not afford the fees to go bankrupt, even though it may be in their interests to do so.
They are intended for people on low income and not in possession of significant assets they could use to help pay towards their debts.
Applying For A DRO
Your financial situation is assessed by a DRO advisor.
Your debts must total less than £50,000. Your assets must not exceed £2,000 in value, but you may own one domestic vehicle worth up to £4,000 on top of this.
Some debts and assets are outside a Debt Relief Order, so don’t count towards this limit.
Your DRO advisor will guide you through the application – there is no setup or application fee.
Being in a Debt Relief Order
When the DRO is accepted you enter what is called the “DRO period”, which lasts 12 months.
During this time you don’t make any payments and creditors cannot take action to recover any included debts.
When the DRO period completes, all included debts are written off.
If during the DRO period you cease to meet criteria, your DRO may be cancelled and you would need to address your debts another way.
Which Debts Are Covered?
Most debts are written off by a Debt Relief Order.
Loans & Overdrafts
Store & Credit cards
Benefits overpayments
HMRC & Council tax arrears
Debts with a Court Judgment
Rent, Gas and Electricity arrears
Catalogues & Buy now – pay later agreements
For other debts contact Financial Guardian for clarification
Certain debts cannot be included in a Debt Relief Order (DRO) such as criminal court fines, debts obtained by fraud, child support arrears and most student loans.
DRO benefits
Once your Debt Relief Order has been accepted, you will benefit from:
No repayments
There are no payments to make into the DRO or towards your debts, and no fees.
100% of included debt written off
When the DRO period ends, all included debts are legally written off.
Legal protection
Creditors cannot pursue you for their debt or take legal action, either during the DRO or once it ends.
Knowing when you’ll be debt free
As long as you keep meeting the DRO criteria for 12 months, you’ll be released from all included debts.
A sense of control
A DRO lets you regain control of your money as you look towards debt freedom.
DRO considerations
As with any insolvency process, entering a Debt Relief Order has consequences:
Impact on your credit rating
Your DRO is recorded on your credit report, which affects your ability to get credit in the medium to long term. Credit reference agencies keep all adverse information for 6 years.
Changes in your circumstances
You must tell the Insolvency Service if your circumstances change during the DRO. If you no longer meet the criteria, the DRO can be cancelled and you’ll need to deal with your debts another way. You remain liable for the debts in full until the DRO successfully ends.
Not private
A DRO is entered on a public register, although someone would need to be looking for you specifically to find it. It is removed 3 months after the DRO ends.
Not available to homeowners
DROs were created as a lower-cost, simpler alternative to bankruptcy where no assets need to be considered.
Personal restrictions
Some restrictions apply for the 12-month DRO period. See below.
Personal restrictions
These apply during the 12-month DRO period. If they are broken, your DRO may be ended and you’ll owe your debts in full again.
While in a DRO you must not:
- Try to borrow £500 or more without telling the lender about your DRO.
- Be, or act as, a company director.
- Create, manage or promote a company without the court’s permission.
- Run a business without telling those you deal with about your DRO.
- Open a bank account without telling the bank or building society about your DRO.
The restrictions usually last 12 months. They can be extended if reckless or dishonest behaviour caused or added to your debt problems.
Not all debts qualify
Debts that can go into a DRO
- Credit cards, overdrafts and loans.
- Arrears on rent, utility bills, phone bills, council tax and income tax.
- Benefit overpayments.
- Hire purchase or conditional sale agreements.
- Some buy now, pay later agreements.
- Business debts.
Debts that can’t go into a DRO
- Any debts obtained by fraud.
- Magistrates’ court fines and confiscation orders.
- Child support and maintenance.
- Student loans.
- Social Fund loans.
- Compensation for death or injury.
Debts that can’t go into a DRO don’t count towards the debt limit. If you’re unsure whether a debt would be covered, contact us.
[external link to Scottish Insolvency Service]
We offer a no‑obligation consultation to determine your suitability and will refer you accordingly.