DRO (Debt Relief Order)

What is a Debt Relief Order? (DRO)

A Debt Relief Order, or DRO, is an insolvency solution designed for people with low available income and limited assets who simply can't afford to repay their debts. It's exclusive to residents of England and Wales.

A lot of people who want to go bankrupt find they can't afford the associated fees. A DRO is a low-cost alternative that could really help you if you have a limited available income (as long as you meet all the other requirements).

You may qualify if:

• You have unsecured debts of no more than £15,000 that you cannot afford to repay
• You have assets worth less than £300 in total (or a car worth less than £1,000)
• Your monthly disposable income (after essential living costs) is less than £50
• You haven't had a Debt Relief Order in the last six years
• You're not involved in any other insolvency proceedings

Not sure if you qualify for a DRO? Call our expert advisers on 0800 195 2911 and we'll talk you through your options.

How does a Debt Relief Order work?

To apply for a Debt Relief Order, you must go to an approved Intermediary (only approved Intermediaries are authorised to complete DRO applications).

All About Money is an approved intermediary, which means you can apply for a DRO direct with us. We can talk you through your situation and help you to decide whether a DRO is right for you.

If you think it is and you meet the qualifying criteria, we can complete the application on your behalf. There is a £90 application fee, which can be paid in instalments if necessary.

If your application is successful, you'll have a 12-month 'moratorium' granted on your unsecured debt repayments - effectively freezing them for a year - meaning you won't have to make any payments and interest or charges will not be added to the included debts. You will also be protected against legal action from your lenders during this time.

If your circumstances haven't improved by the end of the 12 months, all included debts will be written off.

Benefits of a DRO

It writes off unaffordable debts
A Debt Relief Order will protect you against action from any unsecured creditors (included within the Order) or any requirement to make repayments for a year. At the end of this year, if your circumstances haven't improved enough for you to start repaying your debts again, the debts included in the DRO will be written off.

It costs less than bankruptcy
Bankruptcy can be an appropriate debt solution for some people, but the cost is often out of people's reach (a £175 court fee plus a £525 administrative fee - £700 in total) and this can often stop people gaining access to the help they need.

This is one reason why DROs were introduced. A Debt Relief Order costs just £90 (which can be paid in instalments - although the moratorium period will not start until the fee has been paid in full).

You don't have to attend court
Bankruptcy usually involves going to court, but this is unnecessary for a DRO, which can usually be arranged by telephone with the help of an approved Intermediary. They will complete the application on your behalf and send it to you for signing and submitting to the Insolvency Service.

How do I apply for a DRO?

If you think a DRO might be an appropriate solution for you, call us today on 0800 195 2911 or fill in the free call-back form at the top of this page and we'll get back to you as soon as possible.

Beware of additional charges for a DRO!

A Debt Relief Order costs just £90 (for the application fee to the Insolvency Service). However, it has come to our attention that some companies charge an additional fee for the service. You should avoid any company trying to charge more than £90 for your DRO.

What are the downsides to a DRO?

Like all debt solutions, a Debt Relief Order has its disadvantages. Most notably, it is a form of insolvency that will be recorded on the Insolvency Register during the Order period (and for three months after that), and will remain on your credit file for six years. During this time you will most likely find it difficult to borrow any further money, and sometimes the effects can last beyond this period.

What types of debt can be included?

A DRO can only help with unsecured debts (i.e. credit cards, personal loans, overdrafts, catalogue debts, utility arrears, council tax arrears and other similar debts). It can't help with secured debts, such as a mortgage.

There are a few other debts that can't be included in a DRO, such as court fines and student loans. If you're not sure which of your debts can be included, ask your debt adviser (but remember only an approved Intermediary can complete your DRO application).