The Moratorium Period of Debt Relief Order or DRO

The debt solution on this article is  available for England, Wales and Northern Ireland residents.

Once your DRO application is approved, your 12 months moratorium period will commence. After the 12 months moratorium period, all the debts listed under your debt relief order are written off.

Within the moratorium period, you are bound to comply with the requirements stipulated on your debt relief order. If unexpected circumstances arise, it might lead to your DRO being revoked or cancelled. When this happens, you have to find means on how you can manage your debts. Thus, if there are any changes in your situation, which affects your finances, income or budget, you have to let the OR or official receiver informed.

What differences in my circumstances could influence my DRO?

If your situation has improved within the 12 months moratorium period, this may disqualify you from meeting the DRO requirements. This usually happens when there’s an increase in your income. Since you’ll qualify for a DRO when you have less than £50 disposable income, going more than this amount can cancel it. This can happen when any of the events stated below occurs:

  • having a new well-compensated job than the ones you have previously
  • Wage or salary increased
  • Entitlements of benefits have increased
  • You are now eligible for some other benefits that can add up to your income

Your DRO shouldn’t be affected by a small decrease or increase in your income. However, if you have any concerns at all, you’ll need to contact the Insolvency Service. They’ll review your budget and see if you still meet the criteria for your DRO.

What if I receive a lump sum within the moratorium period?

Getting a lump sum of money or an assets to which value can cover debts may have an impact on your DRO. Since a DRO is ceded on the aspect that you can’t shoulder your debts, it defeats its purpose when you obtain a lump sum or property that is of good value.

If you obtain a lump sum or valuable assets during the moratorium period, you need to inform the Insolvency Service right away.

Lump sums can be obtained from as follows:

  • An estate
  • Unexpected windfall
  • Compensation for an injury due to accident or anywhere you obtain good money
  • Backdated payments on benefits
  • PPI reclaims 

Your DRO will not be instantly revoked the moment you get a lump sum for as long as:

  • The amount you get is no more than £1,000
  • It’s should NOT be more than 50% worth of the total value of your debt
  • You have informed the official receiver within 14 days of receipt. If they discover this information without you not letting them know, your DRO will be cancelled.

Moreover, if the lump sum amounts from £1,000 to £1,850, the Insolvency Service will decide based on your financial situation. If it’s meriting over £1,850, your debt relief order will be usually revoked.

How will I know that my DRO moratorium has ended?

You won’t be notified after the DRO moratorium period. If you cannot remember your DRO end date, you can check the Individual Insolvency Register. This reveals you the time the DRO was accepted, and the date the completion date of the moratorium period.

Can I get confirmation that my DRO is complete?

You can confirm that a DRO has been completed by getting a copy of your record on the Individual Insolvency Register which confers the day the moratorium expires. The public record will exclusively be available for three months after the fulfillment date. Once this has reached, the report will be discarded. If you necessitate extra aid after this time, please contact the Insolvency Service. 

What can I do if a creditor refuses to accept that my DRO has ended?

At extremely uncommon circumstances, a lender may attempt to secure a debt included in your debt relief order. If this occurs, you do not have to give payments when they try to recover the debt.

If a creditor decides to pursue a debt after DRO is finished, you can give them a written or hard copy of your record in the Individual Insolvency Register. If a creditor extends to request payment, contact their regulator or ombudsman when needed.

Please be informed that creditors can proceed to demand repayments for certain debts, such as:

Moreover, debt that is considered as fraud will be dealt with differently. Such debts will be taken into account when calculating the allowed limit, but it won’t be written off at the end of the moratorium period.

Some debts can still be pursued through the use of bailiffs. Debts such as criminal fineschild support arrears, and other debts that cannot be included in a debt relief order. You can also check more about your creditor’s response to a DRO.

Who can help?

If you think of applying for a DRO, seek help by calling our DRO specialists or online advisers so we can give you useful ways on how you can deal with your debts.