DRO or what is known as debt relief order is an alternative to bankruptcy. It is a way to write off your debts if you have a low level of debt and if you possess few assets.
A DRO acts or freezes your debt payments with its interests for a year. If your financial capacity remains the same at the end of the DRO period, all your debts will be written off.
How will you apply for a DRO?
If you belong to the low earner, with relatively low debts and few assets, applying for a DRO might be more suitable for you as it is less expensive compared to bankruptcy. This is available if you live in England, Wales, and Northern Ireland. Unfortunately, you cannot benefit from this option if you are living in Scotland. If you wish to apply for a DRO, there are certain qualifications to accept your application.
The first initiative is to determine if a DRO option best suits you by consulting our team of experts to get online advice. Besides, you don’t have to go to court since a judge cannot draft a DRO for you. You may have to find a DRO adviser or an ‘approved intermediary’ to make your application to the Insolvency Service. The Insolvency Service deals with all submitted DROs.
Reasons for a Declined DRO
Since there are certain qualifications to apply for a DRO, below are the most probable reasons why your application might be declined:
- The overall total of your qualified debts is greater than £20,000. This means for you to get approved, your total debts should not exceed this amount.
- Your surplus income exceeds up to £50 each month.
- You were able to declare IVA or bankruptcy, as an option in dealing with your insolvency.
- You are a bonified homeowner.
- Your total assets are valued over £1,000, and any domestic motor vehicle equivalent to this value is added to the overall worth of your assets.
Where to apply for a debt relief order?
We can help you submit your debt relief order application to the Insolvency Service, which serves as the official receiver of all DROs. Of course, our team of advisers will need to assess your financial status to ensure that a DRO is what you need. If we’re able to determine that a DRO best suits your current debt status, we will give you all the details that you need for a DRO application. We may also need details regarding your income and debt. All of this information is to be kept confidential.
Applying for A DRO Online
As soon as our team of advisers or DRO specialist receive the information that we need, they will conduct a thorough check. This is to assess if you are eligible for a DRO. Once found eligible, we will register your application to complete the process. We will let you check your application and once the £90 fee is paid, it will be forwarded to the Insolvency Service.
Debt Relief Order Application Fee
DRO application that is forwarded or submitted to the Insolvency Service through comes with a £90 fee. You can get a special barcode letter for the fee along with your application form. If you are unable to pay the fee upfront, you can pay through installments. This applies to the residents of England and Wales only. Residents of Northern Ireland must have it paid in full. So, the £90 intended for the Insolvency Service is what you must pay for a DRO. If you prefer for installments, your application will be submitted once you’ve paid in full.
What to do if you can’t afford the DRO fee?
Help is available if you can’t handle the DRO fee. In certain cases, a DRO fee can be paid by a charity or trust fund. To do so, you must apply and get qualified. Besides, if you are found eligible for a DRO, our advisers can discuss and give you pointers on how you can get help with your DRO fee.
What to expect after submitting the application?
Once your DRO application is approved by the Insolvency Service, your debts will be frozen for a year (12 months). This process is referred to as the ‘moratorium‘. This process allows you to stop repaying your debts.
Though you accumulate interest and charges imposed by your creditors, an approved DRO will block additional interest and charges. However, interest and charges can resume in the event of revoked DRO or cancellation during your 12 months moratorium. In contrast, if there are no changes in your finances after a year, any debts listed under your DRO will be written off.