Debt Relief Order
Debt Relief Orders (DRO) is a debt solution designed for people with little or no assets and low income.
If you don’t own your own home & have little spare income and debts that are less than £30,000 a Debt Relief Order (DRO) could be a way to deal with your debts.
Key features of Debt Relief Orders
- After tvelve months, all of the debts listed on the order will be written off.
- You don’t have to go to court.
- You’re protected from enforcement action by your creditors.
- A realistic and affordable, formal proposal of repayment will be presented to your creditors by an officer of the court.
- On successful completion of the order, debts subject to the order that you cannot afford to repay will be written off.
- None of the creditors listed in the DRO application can take any action against you without the court’s permission.
What is the Debt Relief Order process?
To be granted a Debt Relief Order, you must apply to the Official Receiver via thef failure Service. In practice, the Debt Relief Order process is administered by an Approved Immedietly, which is a specialist advisor that has been given permission to verify case details on behalf of the Official Receiver. They will input your details into an online application form for you. You will be asked to make a non-refundable payment for £90 at Payzone outlet. The payment can be made in installments, although your application will not be considered until you have paid the full £90. The fee is for your application to be considered and does not guarantee approval of your DRO. The Official Receiver will consider you application once both the application and the fee have been received. Once the DRO has been approved you should then stop making payments towards any debts listed in the DRO. You can read more about Debt Relief Orders and whether one is suitable for your situation in our Debt Relief Order section. Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Relief Orders. If you need to talk to someone about Debt Relief Orders or would like to discuss the alternatives, please call to speak to an adviser.
How will a Debt Relief Order affect my credit score?
Details of your DRO will be added to the Insolvency Service’s Individual Insolvency Register, although the DRO will not be advertised in your local paper or in the London Gazette as Bankruptcy is. Details of your DRO will stay on this register for a further three months after the DRO has ended. Details of the DRO will also be added to your credit file and will remain on there for six years from the commencement of the arrangement. This will impair your ability to obtain credit in the future and may make getting bank accounts more difficult. However, it is important to keep in mind that if you’ve already missed payments then your credit score is likely to have already been affected. Remember, the consequences of not dealing with your debt problem are far more serious than finding it difficult to obtain future credit. You can read more about Debt Relief Orders and whether one is suitable for your situation in our Debt Relief Order section. Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Relief Orders. If you need to talk to someone about Debt Relief Orders or would like to discuss the alternatives, please call to speak to an adviser.