What is a DRO or Debt Relief Order?

A DRO is a debt solution that can help you to write off your debt when you’re unable to repay as it comes due. Debt relief order as a debt solution is only available for residents of England, Wales and Northern Ireland. A similar process is in place through a minimal asset process or MAP bankruptcy.

Though these are a form of insolvency that offers the same solution, they differ in terms of risks, benefits and the costs associated with it.

Criteria to Qualify for a DRO as Debt Solution

When applying for a DRO, you have to satisfy the following DRO criteria:

  • You must be a resident of England, Wales or Northern Ireland, or have traded in one of these countries in the last 3 years
  • Your total debt should be under £20,000
  • You do not own a home
  • Your assets or properties should worth less than £1,000 (you can hold a motor vehicle worth up to £1,000 in addition to this amount)
  • You have not more than £50 left from your income after meeting essential living expenses

For further details check our guide on: How Do I Qualify for A Debt Relief Order or DRO?

How does DRO or debt relief order as a debt solution works?

You can apply for a debt relief order through any of the organizations accredited bu the Insolvency Service like us.

Once your DRO is accepted or approved, any payments towards your debts are all put on hold for 12 months. This period is known as the moratorium. During this time, your creditor cannot take further action to chase you in paying off your debts. However, they can still add interest and charges to your debt. After the moratorium period, if there no improvement in your situation, the debts included in your DRO will be written off.

On the contrary, if your DRO is cancelled or revoked within the moratorium period, your creditors can chase you for paying the debts, along with the interest and additional charges. When this happens, you can explore other repayment alternatives that are suitable for you. If this happens, contact us right away, so we can help you.

How much will it cost to apply for a DRO?

DRO would cost you £90, which will be paid to the Insolvency Service. Your application would not go through not unless you paid this amount in full.

DRO Help and Advice

If you’re thinking of getting a DRO, make use of our free online debt advice tool to help you determine whether a DRO is right for you. Should you prefer to speak with our debt specialist, do not hesitate to contact us on  0800 193 1024.

Your Guide To DROs or Debt Relief Orders

Related Articles: