Debt Relief Order (DRO)
A Debt Relief Order (DRO) is a type of insolvency, much like bankruptcy. It is quicker, less complicated and cheaper than bankruptcy and has been created in order to help individuals who have relatively low debt, few valuable assets and a low disposable income (around £50 per month).
A DRO lasts for 12 months during which time any creditor named on the DRO cannot, unless they have the court’s permission, take any action to recover their monies. Once the 12 month period is finished, the individual is freed of the debts that are listed within the DRO, subject to their situation at that time.
DROs are run by The Insolvency Service in partnership with debt advisers known as `approved intermediaries`. Approved Intermediaries are experienced debt advisors attached to debt advice organisations. The Approved Intermediary reviews the debtors information and determines whether they are eligible for a Debt Relief Order.
Who qualifies for a Debt Relief Order?
A Debt Relief Order is suitable for people who don`t own their own home and for people that meet the following criteria:
- They must not owe more than £15,000 of unsecured debts.
- They must be unable to pay their debts.
- The total value of their assets must not exceed £300
- Their disposable income (after national insurance contributions, tax and normal household expenses) must not exceed £50 per month.
- They must live in England or Wales - or have lived / carried out business in England Wales at some time in the last 3 years.
- The debtor must not have been subject to another Debt Relief Order in the previous 6 years.
- The debtor must not be involved in another formal insolvency procedure at the time they apply.
For further information regarding Debt Relief Orders, please contact us using the quick enquiry form or by calling 0800 228 9 228.
Chase Saunders are not an approved intermediary, but can offer advice in relation to Debt Relief Orders.
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