Debt Relief Order (DRO)
What’s a Debt Relief Order (DRO)?
A Debt Relief Order (DRO) is a formal insolvency process which results in all your qualifying debts being written off. On the 6th April 2024, the government announced in their budget that they have removed the fee to apply for a DRO which had been £90 previously. This means you do not need to make any payments toward your creditors where you qualify and enter into this solution.
Your debts are placed on hold for 12 months before being written off. Only the debts included in the order can be written off so it is important you know who you owe money to.
In order to qualify for a DRO you must not be a homeowner, not have assets worth more than £2000 and not own a vehicle worth more than £4000 (£2000 in Northern Ireland). You must not have more than £50,000 of outstanding debts and must have less than £75 disposable income each month.
Can all debts be included in a Debt Relief Order?
No, not all debts can be included in a Debt Relief Order. Below is a list of creditors that can be included.
- Bank Loans
- Hire Purchase Arrears
- Council Tax Arrears
- Arrears on Gas, Electricity, Water
- Benefits Overpayments
- Credit Card Debt
Debts that can’t be included in a Debt Relief Order?
- Criminal Fines
- Child Maintenance Arrears
- Student Loans
- Fraudulent Debt
- Court Fines
Advantages of a Debt Relief Order
- If your situation is unchanged after 12 months your debt is legally written off
- Creditors cannot contact you or apply interest and charges for 12 months
- No upfront fee (as of 6th April 2024) previously £90.
- It’s a formal arrangement, so you are protected from creditors
- You will not need to attend court
Disadvantages of a Debt Relief Order
- You cannot apply if you’re a homeowner
- Your details will be registered on the insolvency register which is a public record
- Your credit record will be impacted for at least 6 years
- You must be resident in England, Wales, or Northern Ireland
Why choose Curtis Faraday?
We can help you.
We all know how difficult it can be when facing financial difficulties. That’s why we are here for you. Our advisers will listen to your concerns and can provide information on the debt solutions available. We specialise in individual voluntary arrangements and you can find more about them on our website.
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To find out more about managing your money and getting free and impartial debt advice, visit www.moneyhelper.org.uk, an independent service set up to help people manage their money.
