Debt Relief Order – DRO

A Debt Relief Order is an official debt order you can apply for if a person in debt can not afford to pay the debts back to creditors.

A Debt Relief Order (otherwise known as a DRO) is granted by the Insolvency Service and is another solution to combating debt problems.  A Debt Relief Order is much cheaper option than going bankrupt, but its still subject to certain conditions.

The debtor must have debts of less than £15,000 and also a low income.  A Debt Relief Order usually lasts for a year and during that time none of the creditors will be allowed to seek legal action against you to get their money back. At the end of the term you’ll be free of all the debts listed in the order.

The restrictions of applying for a Debt Relief Order are:

• own material objects of value or have savings in-excess of £300
• own a vehicle worth in-excess of £1,000
• have a private pension fund worth over £300.

To apply for a DRO, you first must contact an authorised advisor who then checks whether you meet the criteria.  The Debt Advisor  then applies for the DRO on your behalf.

The cost of a Debt Relief Order is currently £90 but you can pay this in instalments over six months.

How Does a Debt Relief Order Work?