Debt Relief Order

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What is a DRO (Debt Relief Order)?

It can be one of the quickest ways to give yourself a fresh start.

A Debt Relief Order (DRO) is a personal insolvency process. It provides you with legal protection from your creditors and your debts are written-off after one year.

DROs are one way to deal with your debts if you owe less than £20,000, don’t have much spare income and don’t own your home.

If you qualify for a DRO:

  • your creditors can’t recover their money without the court’s permission
  • you’re usually freed (‘discharged’) from your debts after 12 months
  • Qualifying criteria for a DRO

    To qualify for a DRO you must meet all the criteria below:

  • You have debts less than £20,000
  • You’ve less than £50 a month spare income
  • You’ve less than £1,000 worth of assets
  • You’ve lived or worked in England and Wales within the last 3 years
  • You haven’t applied for a DRO within the last 6 years
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    DRO Restrictions

    You must follow rules called ‘restrictions’ if you get a DRO.

    If you apply for a DRO, you must abide to the following restrictions

  • You can't borrow more than £500 without telling the lender about your DRO
  • You can't act as the director of a company
  • You can't create, manage or promote a company without the court’s permission
  • You can't manage a business without telling those you do business with about your DRO
  • If you want to open a bank account, you may also have to tell the bank or building society about your DRO

  • These restrictions usually last 12 months. They can be extended if careless or dishonest behaviour caused your debt problem. For example, you lied to get credit. The official receiver will tell you if they should be extended. To extend them, you’ll be asked to agree to a ‘Debt Relief Restrictions Undertaking’. The court can issue a ‘Debt Relief Restrictions Order’ if you don’t agree

    What you still have to pay

      Whilst you have a DRO you will still have to pay:

    • your rent and bills
    • certain debts that aren't included on your DRO e.g students loans, court fines

    DROs can be cancelled if:

    • your finances improve
    • you don’t co-operate with the official receiver - eg you don’t give them the information they ask for

    If you get new debt after your DRO is approved you could:

    • get a bankruptcy order
    • be prosecuted if you don’t tell new creditors about your DRO

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