A Debt Relief Order (DRO) is one way to deal with your debts as long as you meet the criteria.
A DRO normally lasts 12 months after which you will be discharged and your debts will be written off.
Obtaining a Debt Relief Order
You get a DRO from the Official Receiver, an officer of the Bankruptcy Court, but you must apply through an authorised debt adviser. They will help you fill in the paperwork.
Search online for The Money Advice Service which has information about how to apply.
There is a one time set up fee of £90.
You will be eligible if you meet all of these criteria:
you owe less than £20,000 to your unsecured creditors
you have less than £50 a month spare income after taking into account all of your necessary costs
you have assets worth less than £1,000
you have lived or worked in England, Wales or Northern Ireland within the last 3 years
you have not applied for a DRO within the last 6 years
If you successfully apply for a DRO you cannot
borrow more than £500 without telling the lender about your DRO
act as a director of a company
create, manage or promote a company without the court’s permission
manage a business without telling those you do business with about your DRO
If you want to open a bank account, you may also have to tell the bank or building society about your DRO.
The restrictions usually last for 12 months. They can be extended if careless or dishonest behaviour caused your debt problem. For example, you lied to get credit.
What you need to know
While you have a DRO you still have to pay your normal household bills and certain debts such as Student Loans and court fines.
DROs can be cancelled if your finances improve whilst the DRO is in force or you do not co-operate with the Official Receiver, for example if you don’t give them the information they ask for.
Your DRO will be added to the Individual Insolvency Register. This is a public record. The record is removed after the DRO ends. Your DRO will stay on your credit record for at least 6 years.
Call us today to speak with one of our advisors who can help you understand your options and find out the right choice for you. We're here to help on 0800 019 8383.