Debt Relief Order (DRO)
A DRO is a way of cancelling or writing off your debts. You will not have to deal with the people you owe, also called 'creditors'.
Is a DRO right for me?A debt relief order is a way of cancelling, or 'writing off' your debts. This happens if your finances do not get better after 12 months.
During this time, you will not pay back what you owe. Interest and charges will stop being added to your debts. You do not have to deal with the people you owe money to.
Your approved intermediary will let you know everything you need to do. An approved intermediary is an organisation that deals with DRO applications.
You cannot get a debt relief order if you live in Scotland. The Minimal Assets Process (MAP) bankruptcy is similar.
Benefits of a DRO
- The people you owe money to will stop collections activity
- Your debts will be cancelled, or 'written off' after 12 months
- Interest and charges will also be cancelled. These can be put back on your debts if your DRO fails
- Your approved intermediary will send your application for you. This means you do not have to go to court
- You will be able to keep your household goods
- There is no fee to apply for a DRO
Risks of a DRO
- It is kept on a public register for 15 months
- It stays on your credit file for six years after it starts. This could make it harder to get credit in the future
- It could be cancelled if your finances get better during the 'moratorium period'. This is for 12 months after your DRO is approved. The people you owe may then ask you to pay them back and add interest and charges to what you owe
- It could be cancelled if you break the rules of your DRO
How to Apply for a DRO?
- The first step is to see if a debt relief order is right for you. Use our free online debt advice tool at a time that suits you.
- We will let you know if you can apply for a DRO. If we recommend this we will share information about how to apply and how a DRO could affect you.
- You can only apply through an approved intermediary. Submit your application to the Insolvency Service for free.
Common DRO Questions
You should always get free and impartial advice before going ahead with any debt solution. To find out which option is best for your circumstances, we will ask you a series of questions during a debt advice session, including:
- How much money you owe and who do you owe money to
- What types of debts you have
- How much you can pay towards your debts
- Whether your circumstances could improve in the future
DROs are for people who have a small amount of debts and a low income. They can be a cheaper alternative to bankruptcy. To apply for a DRO, you must:
- Live in England, Wales or Northern Ireland
- Owe less than £50,0000
- Have less than £2,000 in assets and a car worth no more than £4,000
- Have less than £75 in surplus income per month after paying your household bills and living costs
Firstly, have a debt advice session online or over the phone. If we think a debt relief order is right for you, we will let you know. You will then get a step-by-step guide to applying.
It stays on your credit file for six years after it starts. This could make it harder to get credit in the future. Your DRO will also be kept on a public register for 15 months. This is online for anyone to view. It may also affect your credit file.
There is no fee. You can submit your DRO application to the Insolvency Service for free.
The Gov.UK website says you can request a refund if you paid the fee before April 6th 2024. Speak to your intermediary about the fee if you have already paid and not had your application rejected. They will let you know if you can apply for a refund.
If you own your home, you cannot get a DRO. Even if the property is in negative equity.
If your IVA is terminated, you can start looking into different solutions like a DRO. If you are on an active IVA and want to change to a DRO, speak with your Insolvency Practitioner. They will talk you through your IVA if it is not working for you.