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You are here: Home / An overview of debt solutions / Debt Relief Orders (DROs) – answering your questions

Debt Relief Orders (DROs) – answering your questions

Woman reading Guide to Debt Relief Orders (DROs)

A Debt Relief Order is a very simple and cheap form of insolvency in England, Wales and Northern Ireland.

This article is an in-depth guide, so you can:

  • see if you are likely to meet the DRO criteria;
  • decide if this is your best option for your financial problems;
  • look in detail at what can happen during a DRO and after it ends.

Update – the DRO limits described in this article are the new limits introduced from the end of June 2021. 

An overview of DROs

Read What is a Debt Relief Order (DRO)? for an overview of DROs and how they work.

In a Debt Relief Order (DRO):

  • you pay one £90 fee at the start;
  • you don’t have to make any monthly payments at all;
  • your creditors can’t chase you, take you to court or send round bailiffs;
  • at the end of a year, your debts are wiped out.

Most types of debts can go into a DRO, including any CCJs and bills such as council tax and utilities. Student loans are the most common exception.

There are strict criteria to be allowed to start a DRO including not owning a house, having less than £20,000 in debts and having very little spare income each month.

Do you qualify for a DRO?

The DRO rules can’t be fudged:

  • you can’t choose to leave a debt out of a DRO to get under the £30,000 limit (but this limit may be increased in May 2021);
  • you can’t own a house, even if there is no or negative equity in it or if it is not possible to sell it;
  • some debts can’t be included in a DRO, see this list.

The hardest rule for most people to understand is that you can’t have a DRO if you have  “more than £75 a month spare income“:

  • this is the amount of money you have leftover after paying your bills (rent, council tax, utilities, TV license, mobile etc) and your other expenses (groceries, toiletries, clothes and school uniforms, petrol, bus pass etc)
  • it doesn’t take into account the payments you are currently making to your debts, because these payments stop in a DRO.

This may be difficult for you to assess – even if you would be paying more than £75 a month to a DMP or IVA, you may still pass the DRO check as the calculations are different.

If your only income is from benefits you will pass this test even if your income sounds high because of disability benefits – this is because for disability benefits you are allowed to include an expense line for “adult care costs” which is how much you are getting in disability benefits. This is sensible – you are getting PIP for example because you have higher than normal expenses.

If you are unsure if you qualify for a DRO, talk to one of the charities that set up most DROs: Citizens Advice or National Debtline on 0808 808 4000 if you prefer to use the phone.

If you don’t meet the DRO criteria, they will be able to help you look at your other options.

Is a DRO your best option?

If your debt problems aren’t likely to be quickly resolved and you meet the DRO criteria, a DRO is almost always better than most other debt solutions:

  • It’s better than an IVA or DMP because you don’t have to make any payments and it is over much quicker.
  • It’s better than bankruptcy because the fees are much lower and the procedures simpler.

DROs are meant for serious, long-term debt difficulties.

If your debt problems are only temporary – perhaps you expect to get a well-paying job soon – don’t choose a DRO. Instead look at the option of a Debt Management Plan – if you can’t pay much now, you can offer a token £1 a month to each debt until things get better.

And if you expect to get a chunk of money in the next year, a DRO is usually best avoided. See a reader’s question about the timing of a DRO and redundancy for an example.

One alternative that can work well for some people is Full & Final Settlement offers if you could get a lump sum, for example by getting payday loan refunds.  If you think this might be a possibility, don’t opt for a DRO, instead start a Debt Management Plan even if you can only make token £1 a month payments.  If a few months later you don’t get enough money to make your debts manageable, you can then choose a DRO.

Applying for a DRO and what happens afterwards

Your DRO Adviser is the best person to ask any questions about the application process, but I have gathered together some common ones here:

  • FAQs about DRO applications.

Some common questions people have about DROs include::

  • Will debt collectors stop contacting you?
  • How does a DRO affect your credit record?

What happens in a DRO

No-one monitors what you spend your money during a DRO. It is very non-intrusive!

But you have to inform the Insolvency Service if your income goes up or you get a lump sum of money. Or there is some significant change in your circumstances.

  • What happens if your income goes up? – if your income goes up or you acquire some money – perhaps from an inheritance or a PPI payout – you need to inform the DRO Unit.
  • What happens if you move in with a new partner? here your income and expenses may change.
  • What happens if you inherit money? You get to keep the money but it’s likely your DRO will be cancelled if you inherit more than £2000. If there isn’t enough money to repay your debts, you should consider “disclaiming” the bequest.
  • How a DRO affects refund claims  – you should not try to reclaim PPI whilst you are in a DRO. People who have had a large payout have had their DRO revoked.
  • Can I give my daughter in a DRO a car? – a reader’s question… I look at the alternatives.
  • Your pension and your DRO – you must not take any money out from your pension whilst you are in a DRO.

What happens after a DRO ends?

The debts that were listed in your DRO application are wiped out.

  • What happens at the end of a DRO?
  • How to improve your credit record after a DRO
  • DROs and your credit score – this looks at whether you can ever get a mortgage after a DRO.

Why no-one talks about DROs

You may wonder why you have never heard of a Debt Relief Order. They aren’t complicated, expensive or unusual. There have been 250,000 DROs in the last ten years – more people choose a DRO than bankruptcy!

But no-one makes any money from them. The DRO fee is only £90 and the organisation that sets up your DRO will only get £10 of this. As a result, almost all DROs are set up by charities.

Fee-charging debt management companies and IVA firms are supposed to give people good advice on what their debt options are, but the regulator says this often isn’t happening. If you look at DMP and IVA firms websites and adverts, many of them simply ignore Debt Relief Orders. That doesn’t mean that DROs are a bad option if you have debts – just that they aren’t a profitable option for those firms.

Comments

  1. Sylvia says

    March 25, 2021 at 11:53 am

    Dear Sarah! I definitely qualify for a DRO, I have spoken to a debt advisor. I meet all criteria, however I am baffled on a particular thing and didn`t find any information. I have a share in a property overseas (EU), which would cover my debt- around 5K. However it is not easily marketable, as my sibling is the other owner, plus my Grandma, who under the country laws has usurer rights and according to this upon a sale, 20% of the sale price would be for her and the rest would be between me and my sibling. The property has numerous problems on the top of it as some of the plots around it are in a shared ownership and we couldn`t agree with those people for many decades. Can a sale be forced on them just because of me? If it would be a forced sale, I assume it would be for a very low price, which I must avoid at all costs. Do I need to declare such a problematic property or I have to show the legal background to prove what I say? What to do in a situation like this?

    Reply
    • Sara (Debt Camel) says

      March 25, 2021 at 12:01 pm

      Sorry but you don’t qualify for a DRO because you own a property.
      You have to declare the property and that rules you out, it doesn’t matter that it can’t be sold…

      How large are your debts? How old are they?

      Reply
      • Sylvia says

        March 27, 2021 at 9:38 am

        The debts are 6-8 years old, around 5000 pounds. My husband has around 11000 thousand under his name. He has no assets. Can he apply only himself, because of the property under my name. I inherited from my mum. How is considered the monthly surplus income when you are a married couple in a same household? Is it halved by 50-50?

        Reply
        • Sara (Debt Camel) says

          March 27, 2021 at 10:12 am

          Yes your husband could apply for a DRO – your property will not affect that.

          When drawing up the income & expenses for someone in a couple, the Joint expenses such as rent, utilities are usually divided according to who has the most income. So if A’s income is twice as much as B, then A is normally expected to pay two thirds of the rent and bills. A DRO adviser will go through this in detail.

          Reply
          • Sylvia says

            March 28, 2021 at 2:04 pm

            Thank you so much for your answer, I will consider it.

  2. Harry says

    March 26, 2021 at 2:09 pm

    Hello Sara,

    I am renting a 3 bedroom property even though I am only eligible for a 2 bedroom under Universal Credit. One child is at university whilst the other now works and lives an hour away and often visits. Obviously I would like to live in what has become “my” family home. I have it now on a very good rate as I have been here for 7 years, and most 2 bedroom properties in the area rent for the same or more than the one I am currently in. If I moved to a different local town, the 3 bedroom properties are still more than I am now paying now but it does have some 2 bedroom properties which are less desirable for approximately £250 less per month perhaps even £350. These aren’t the sorts of areas I would feel secure in. Would I be rejected for a DRO because a DRO officer would deem my rent too high as it would be possible to rent more cheaply if I moved to a more undesirable property?

    Thank you in advance.

    Reply
    • Sara (Debt Camel) says

      March 26, 2021 at 2:37 pm

      It is unusual for your choice of where to live to be questioned, but talk to a DRO adviser about this.
      After all the child at uni still lives there for more than a third of the year. And moving to a 2 bed locally would not save you money.

      Reply
      • Harry says

        March 26, 2021 at 11:15 pm

        I appreciate this very much. Thank you.

        Reply
  3. Ben says

    May 1, 2021 at 2:45 pm

    Hi.
    I was wondering if there has been any news on the possible increase to the D.R.O?
    Thankyou
    Ben

    Reply
    • Sara (Debt Camel) says

      May 1, 2021 at 3:57 pm

      yes – the Insolvency Service is now expected to announce what the changes will be after the May elections and they may be introduced end June-ish.

      Reply
  4. Jules says

    May 7, 2021 at 7:35 pm

    I have contacted Stepchange today and was told that I meet the criteria for a DRO for my old debts of 11K. I am a full time mature student and was fortunate to secure a bursary last year of £1500 – £500 per term – and am worried that if I should secure it again next year this will affect my DRO if I decide to go ahead with it. I presume it is considered an increase in income. I know the bursary is not taken into account as income for benefit payments, would you know if it is treated as income on a DRO? Thank you.

    Reply
    • Sara (Debt Camel) says

      May 7, 2021 at 7:55 pm

      is this your only income apart from benefits?

      Reply
      • Jules says

        May 7, 2021 at 9:20 pm

        I have taken out student finance (maintenance loan), I receive child tax credit, child benefit and receive approx. 40% of my rent in housing benefit.

        Reply
    • Sara (Debt Camel) says

      May 7, 2021 at 9:56 pm

      in that case I think you should be fine – but do explain what will happen to the adviser at StepChange – they need to know your full situation now and what might happen in the next year.

      Reply
      • Jules says

        May 7, 2021 at 10:29 pm

        Ok brilliant, thanks Sara

        Reply
  5. Tina says

    May 9, 2021 at 12:48 pm

    Hello Sarah ,
    I’ve entered the dro 2 months ago.
    Everything was fine until yesterday when i’ve received the bad news that my mum had a stroke and she’s in the hospital!
    I am planning now to go back to my country as soon as possible!
    I don’t know how long I have to stay there, it all depends on my mother’s condition!
    I know that I must inform the official receiver of any changes, including a change of address !
    I am on universal credit +furlough at the minute but if i go back to my country and if
    stay there for more then 2 months i will ptobably lose my universal credit and the furlough !
    My question is how this going to affect my DRO?

    Reply
    • Sara (Debt Camel) says

      May 9, 2021 at 1:31 pm

      Yes you need to tell the OR where you are going. Explain the circumstances, say you don’t expect to be working abroad, but if you earn anything you will inform the OR.
      As your income seems likely to fall it can’t harm your DRO.
      Talk to your local Citizens Advice about your benefit situation while you are abroad and any concerns about retaining your tenancy.

      Reply
      • Tina says

        May 9, 2021 at 3:34 pm

        Thanks very much Sarah for your advice, appreciate it

        Reply
  6. Frank says

    May 11, 2021 at 2:40 am

    Hi Sara,

    I’m worried ill be made redundant and am now living abroad..

    Can I apply for DRO from outside of the U.K.?

    Reply
    • Sara (Debt Camel) says

      May 11, 2021 at 8:16 am

      I agree with this comment made on another page: https://debtcamel.co.uk/proposed-dro-changes/comment-page-1/#comment-418361

      Reply
  7. Bev says

    June 4, 2021 at 12:51 pm

    Hi. I had a DRO in Aug 17 every company satisfied the debts at that date so they all dropped off when the DRO ends. However United Utilities satisfied them a year later Aug 18? So basically the DRO ends Aug 2023 but these two stay on an extra year? Is that correct? As every other company satisfied them on the DRO date? I thought they have to last 6 years as UU debt is then 7 years? Thanks in advance Bev

    Reply
    • Sara (Debt Camel) says

      June 4, 2021 at 1:04 pm

      UU should have added a default of the start date of your DRO. See https://debtcamel.co.uk/repair-credit-record-dro/. As UU to correct this.

      Reply
  8. Wendy says

    June 28, 2021 at 11:15 am

    Hi sara
    Quick question please….I recently received a letter from Barclay card to say that they were refunding old unfair fees of £115. Letter said it would be coming off old balance which had been sold to Hoist finance uk. This debt was included in my DRO on november 2018 which is now £0 on my credit report and isnt active. I rang them and they said they will write to me again about the matter as there has been other people in my situation. What do you think should happen? Should I receive the amount to me personally or will it just be a write off? Thanks sara for your help. Wendy

    Reply
    • Sara (Debt Camel) says

      June 28, 2021 at 11:58 am

      It will probably be a write off I am afraid.

      Reply
      • Wendy says

        June 28, 2021 at 12:09 pm

        Okay thank you sara for your advise. Wendy

        Reply
  9. Deb says

    June 28, 2021 at 8:28 pm

    Does this order stop a council eviction?

    Reply
    • Sara (Debt Camel) says

      June 28, 2021 at 9:54 pm

      Is this rent arrears on a council house? do you have a suspended possession order?

      Reply
  10. jimbob says

    July 9, 2021 at 11:06 am

    Have a DRO. Information received will eventually attain 7k inheritance. Advisers have conflicting views. One says inform IS when it is received as a physical asset. Other says when you know the value. Do you have a definitive answer which is correct

    Reply
    • Sara (Debt Camel) says

      July 9, 2021 at 11:10 am

      What matters is the date of death – there is no particular significance about the date the money arrives in your bank account. I would inform them as soon as you are aware of the amount.

      Reply
  11. jimbob says

    July 11, 2021 at 4:27 am

    What date do the DRO Unit give to the creditors for the revocation. If that is also the date of death it could be very significant. As per article in CAB site. Creditors may start to apply interest from revocation date.

    Reply
    • Sara (Debt Camel) says

      July 11, 2021 at 6:56 am

      So far as I know, the revocation date is when the DRO unit makes the decision.

      But I suggest you should stop worrying about what happens immediately the DRO is revoked. How much interest is applied is irrelevant, isn’t it? Because you will be looking at bankruptcy, and that will be the same if you owe 10k, 15k or 100k. And you may well find that creditors don’t start to reapply interest at all….

      Reply
      • jimbob says

        July 11, 2021 at 9:17 am

        The local council have realised funeral costs have been deducted. They are now saying estate worth between 7.5k and 7.8k. Total debt at point of being frozen being 6.3k. Our home condition has recently become a point of concern with Adult Social services. So my point of thinking was 7.5k less 6.3k leaves 1.2k. Creditors paid and enough to rectify points of concern of Social worker

        Reply
  12. jimbob says

    July 11, 2021 at 11:28 am

    My other final point would be. If the inheritance was above the debt amount i would be thinking i had a legal requirement to clear the debts in full

    Reply
    • Sara (Debt Camel) says

      July 11, 2021 at 11:32 am

      No – you can offer a lower full and final settlement if you want – your creditor doesn’t have to accept it but you can offer one. In this sort of case you can say you inherited X, you have had to spend Y on essentials (list them) so you are offering to divide X – Y between your creditors and if these offers are not accepted you intend to go bankrupt.

      What sort of debts are in your DRO? Not all creditors will take a F&F.

      Reply
      • jimbob says

        July 11, 2021 at 12:10 pm

        A big thank you for the reply. This now makes sense to me. It gives me great clarity that we have a route to becoming Social worker friendly. Debts are. Vanquis CC 3.7K. Barclaycard 800 pound. Capital One 1.2k. Argos Card 220 pound. And Creation { Currys a/c} 410 pound. { Vanquis card was always maxed out but kept offering large increases}

        Reply
  13. Dave says

    August 4, 2021 at 10:30 am

    Hi, great website, thank you.

    I’m a British Citizen residing in a Southeast Asian Country and considering applying fro either DRO or BR. I understand that I must have lived in the UK within the last 3 years to apply for either. My question is, how exactly do they determine where you were ‘living’ – I was always on a tourist visa until January 2019, and also had periods of travelling around between countries prior to then also. If I did apply for BR, would I have to show proof of living in the UK within 3 years? What forms would be accepted?

    Also, if I still have available credit now can I utilise this before I filing the application?

    Thanks in advance.

    Reply
    • Sara (Debt Camel) says

      August 4, 2021 at 1:48 pm

      I suggest you talk to National Debtline who you can contact from abroad: https://www.nationaldebtline.org/

      Reply
  14. Abdul says

    August 9, 2021 at 3:36 pm

    Hello,

    I have four creditors with different amounts owed, with one as low as £1,500 and another as high as £6,000, with a total debt of around £16,000.

    All interest is frozen and I am in correspondence with all my creditors. I am currently working in a low-paid role and am reliant on Universal Credit. I can, however, save some money each month.

    Am I allowed to clear the lower amounts ahead of the higher amounts? ie instead of paying each creditor the same percentage, am I able to save for the £1,500 balance, for example, and pay that off first before then aiming to pay the next creditor? Or would this count against me if I enter a DRO or bankruptcy down the line?

    My hope is to avoid a DRO or bankruptcy and pay off the debts I owe, hence why I’m exploring the idea of slowly paying creditors off.

    Thank you

    Reply
    • Sara (Debt Camel) says

      August 9, 2021 at 3:45 pm

      How much are you paying in monthly payments at the moment to them in total? Are you paying them all the same amount of dividing the money so the largest gets the most?
      Do you expect your situation to improve much over the year or two?
      I assume you are renting – do you own a car?

      Reply
      • Abdul says

        August 9, 2021 at 4:27 pm

        Thank you, Sara.

        Not paying anything at the moment and haven’t paid anything for nearly four years as I had serious mental health problems and experienced homelessness. Presented all this to them via a debt advisor and a homelessness charity and everything has been put on hold. I’ve now got myself back up on my feet and have a secure tenancy and a (low-paying) job, and any excess money I make I am saving.

        I do expect – though more hope – that my situation will improve slowly in the next 12-24 months, and I am renting and don’t own a car..

        I have considered a DRO and bankruptcy – your guides here invaluable, and thank you – but I also hope to maybe pay these debts off one day (I feel I may be too honest/naive/idealistic). I appreciate the six year limit is approaching and debts could be considered statute-barred, but I also feel that having gone through an advisor and asking for assistance has somehow acknowledged the debt, so the six year limit could have been reset and I don’t want to count on it as I stll have hopes of paying.. but I am also realistic and will seek help from an advisor if I need..

        Abdul

        Reply
    • Sara (Debt Camel) says

      August 9, 2021 at 5:03 pm

      It’s good you are now in a much better position.
      But really with a secure tenancy this is the time to clear out the debt and get a fresh start. If you are on UC I doubt you can be abl;e to save more than £75 a month – that would just take way too long to clear that mountain. Also if you were homeless and the tenancy is pretty new, you probably need to keep buying the odd thing for the house – it’s good for your mental health to be able to do that and not worry about how much you have saved up to try to pay off this debt.

      If you earn more your UC drops.

      I doubt that many of the debts will go statute barred. It happens less often now. IF you wait another year or two then are contacted and opt for DRO then, you have just delayed getting clear of the debts.

      So I suggest you do yourself a big favour and talk to National Debtline now about a DRO.

      Reply
      • Abdul says

        August 9, 2021 at 5:11 pm

        Sure. Will do that and ask their advice and next steps. The ‘fresh start’ idea sounds appealing, and will no doubt provide a boost mental health-wise. Thank you!
        Regards,
        Abdul

        Reply
  15. Abdul says

    August 16, 2021 at 10:46 am

    Hello again,

    When submitting an income and expenditure sheet, what costs are allowed to go on there? I ask because the range of spreadsheets out there differ, with some specifying more than others, and some with just ‘other’.

    Are items such as cigarettes, clothing, gifts for birthdays/xmas, days out etc. allowable? Or would an Official Receiver consider these frivolous? I have an impression that the OR would suggest cutting down on such activities to allow debts to be repaid..

    Thank you,
    Abdul

    Reply
    • Sara (Debt Camel) says

      August 16, 2021 at 11:00 am

      I suggest you talk to a debt advisor such as National Debtline on 0808 808 4000. They have a budget sheet here https://tools.nationaldebtline.org/yourbudget/, I suggest you start with what you actually spend money on. A lot of people who are on low pay and get UC are very likely to meet the “less then £75 a month spare income” criteria.

      Reply
  16. Maria says

    August 18, 2021 at 2:47 pm

    I am currently up to date with all my credit card payments (only paying the minimum amount) but this leaves me literally nothing left at the end of the month. Should I continue to pay these or stop paying them all? And if I stop paying them and as a result I am left with more than £75 per month in the bank, will that stop me from getting a DRO?

    Reply
    • Sara (Debt Camel) says

      August 18, 2021 at 6:01 pm

      I think you should talk to National Debtline on 0808 808 4000 about your situation. It is common for people to be paying so much to their debts that they have cut back other expenses to a level that is not sustainable. You can get away with no clothes for a short while but not for the years it takes to clear credit card debt.

      If you have too much “spare” for a DRO, then a debt management plan where interest is frozen on the credit cards may be a good option for you. National Debtline can talk through the pros and cons of this.

      Reply
  17. Dawny says

    September 17, 2021 at 10:58 pm

    I do not think a DRO is suitable for me, in fact I do not know what is suitable for me. i ran up a lot of debit prior to 2016. In 2016 I finally added up all my debt and it came to over £18,000. I tried just to pay it off but it went down so slowly and made me depressed. I then rang all the people I owed money to and three of the lenders put me on a payment plan with no interest. Another one reduced the interest considerably and gave me a refund of interest from when I had contacted them to ask for help (£250) which considerably reduced the amount I owed them. I have paid off all my overdraft during COVID, and I managed to snowball some credit cards especially the ones I owed a small amount to – I paid three credits cards off. Instead of 10 creditors I now have just 6. I have now added up what I owe and next month it will be below £10,000. I have tried to work out when they will be paid off and it looks like 2024. Do I continue paying off my bills like I am doing – out of 6 creditors – 4 have no interest and a payment plan. One I am throwing all spare money at and the other seems to be coming down each money slowly. I now have nearly £2000 in savings as well which I do not want to touch as it is for emergencies and so that I do not have to take out credit again. Shall I continue as I am until 2024 or should take out a CRO? I work full time and have about £250 left each month after paying my bills and groceries etc.,

    Reply
    • Sara (Debt Camel) says

      September 18, 2021 at 6:21 am

      If you will be debt free in 2024 then you don’t need a DRO so it’s best to carry on.

      A series of payment arrangements can work well, it’s like a Debt Management Plan. Who are the two creditors who haven’t frozen interest?

      Reply
      • Dawny says

        September 19, 2021 at 10:02 pm

        tesco credit card and a company called Clockwise – however it is manageable – I just have moments I feel so down about the debit. I try to stay positive and can see progress. It also knowing I am not the only person in this situation.

        Reply
        • Sara (Debt Camel) says

          September 20, 2021 at 7:20 am

          I suggest you read https://debtcamel.co.uk/creditor-wont-freeze-interest/ and send them both a complaint about not freezing interest. List all your other creditors who have frozen interest and say how their refusal is prolonging the time you are in problem debt.

          Reply
          • Dawny says

            June 10, 2022 at 10:34 pm

            Hi Sara

            since I messaged in September 2021 – I have now paid off Tesco credit card so that bill has gone. I also got about £160 from Quickquid which I was not expecting. this is from a loan ages ago. I thought the email was a scam but just after the email I had the money in my account. I now owe under £8,000 and I am feeling a lot happier. Instead of £250 left each month, I have almost £400. So there is light at the end of the tunnel. I still have to budget tightly and keep a spreadsheet of what I am spending. I just wanted to say how I love all the information and advice on Debt Camel.

          • Sara (Debt Camel) says

            June 11, 2022 at 9:30 am

            Happy things are going well for you.

  18. Sam says

    November 4, 2021 at 6:17 pm

    My DRO was discharged 1st October 2021. I’ve just checked my credit report and all my debts are still showing as open with the full amount still owed. I had 5 creditors totalling around £19000. It’s showing that I’ve defaulted every month since 1st Oct 2020 to present but should this not have stopped?

    Reply
    • Sara (Debt Camel) says

      November 4, 2021 at 6:23 pm

      This is still pretty recent. Most creditors only update the credit reference agencies once a month. I suggest you wait until January and if your credit reports at that point do not have all the debts marked as satisfied or partially satisfied AND have a default date on or before the date your DRO started, then complain to the creditors. See https://debtcamel.co.uk/repair-credit-record-dro/ for more about this.

      Reply
  19. Kai says

    December 1, 2021 at 7:38 am

    Hi Sarah

    I applied for a DRO July 2020, which was successfully discharged July 2021. I’ve been checking my credit report regularly and have noticed that one of the creditors Three Mobile is still on there. I’ve contacted Three and all they keep saying is that if I want to make payment to clear the balance I can. What can I do about this?

    Also I had a Credit Union loan which was part of the DRO. I know that the CU were upset that I applied for a DRO and felt their loan should have been excluded. Recently I set up a standing order to save and noticed that it was being used to pay back the loan first. Which I was fine with (feel guilty that CU money are peoples savings and not like a bank) but they won’t update the info on my credit report to reflect that payments are being made and the balance has reduced. What can I do?

    Any advice would be greatly appreciated.

    Reply
    • Sara (Debt Camel) says

      December 1, 2021 at 9:04 am

      See https://debtcamel.co.uk/repair-credit-record-dro/ which looks at how to get Three to correct your credit record.

      Re the credit Union – they should not be doing this, the debt no longer legally exists. There is no rule which says Credit Unions are nice people and you should repay them afterwards. I suggest you complain and ask for a refund as well as for them to correct your credit record to show that a xero balance is owed. Take your complaint to the Finacial Ombudsman if they refuse.

      Reply
      • Kai says

        December 1, 2021 at 7:33 pm

        Thanks Sarah.

        Re: Credit Union, do you mean a refund of my standing order payments they’ve applied to the loan balance after the the DRO ended. I’m just wondering would they even refund me after I agreed it can be used towards the loan balance. After the DRO ended I wanted to check my savings balance and found my account suspended. They said the only way for the suspension to be lifted is by paying off the loan balance. That’s the only reason why I agreed.

        Reply
        • Sara (Debt Camel) says

          December 1, 2021 at 8:34 pm

          How large is the loan balance? And the savings balance?

          Reply
      • Kai says

        December 2, 2021 at 10:26 am

        Hi Sarah

        My loan balance at the time of the DRO was £1744. I have savings of £911 which was offset against the loan balance. They also took a final payment of £128 which I couldn’t cancel (salary deduction) at the time the DRO was granted.

        The loan balance was then £722.75.

        I have since saved £240 with the CU since the DRO ended. But this has been all applied to the loan balance, which now stands at £482.75.

        They’ve also added a fee of £100 as the account was on hold but said they can look at waiving this.

        Reply
        • Sara (Debt Camel) says

          December 2, 2021 at 11:11 am

          This sounds completely wrong. Send them a complaint in writing saying that after the DRO year ended , you no longer owe this money so they should not take the amount you are currently trying to save to pay it off.

          Ask for them to close the loan and move the payments you have made since your DRO ended to a savings account. Send the complaint to the Financial Ombudsman if they refuse, this is easy to do see https://help.financial-ombudsman.org.uk/help

          Also i suggest you stop saving with them until this is sorted out! Do you have another savings account?

          Reply
      • Kai says

        December 2, 2021 at 11:20 am

        Thank you. I am going to do as you suggested. I have since opened a new savings account with another CU. I only wanted to maintain a relationship with this one as my employer does salary savings scheme with them so it made sense that money was taken straight away when I got paid.

        Reply
  20. David Holler says

    December 7, 2021 at 12:12 pm

    Hi Sarah,
    I was approved DRO few months ago including all my debts at sum £21000 and now I have been contacted by one charity who helped me to pay outstanding balance on my rent sometimes in May this year, now they offered £500 to pay me because of shortage on my Universal Credit between September and December 2021(£20 per week,all together £500)
    Do I need to tell this to DRO officer?
    Thank you for your help.
    Kind regards,
    David

    Reply
    • Sara (Debt Camel) says

      December 7, 2021 at 1:03 pm

      Yes, you should do. I don’t think this will be a problem, but it is likely you should inform the insolvency Service what has happened – the adviser that set up your DRO will know the details of your case and can advise.

      Reply
  21. Natasha says

    December 28, 2021 at 5:11 pm

    Hi Sarah,
    March will be my second year completed IVA. I am also going to be going on maternity leave for a year with statutory maternity pay (90% for 6 weeks then approx £150 per week for 33 weeks). My IVA is £324 per month and am really stressed that after the 9 month break I won’t be able to cover the payment’s. I have no assets, and ready worried about paying bills etc whilst off. Are there any other options?
    Thank you

    Reply
    • Sara (Debt Camel) says

      December 28, 2021 at 5:29 pm

      How is paying the £324 going at the moment?
      Is this your first child? Do you have the basics for when you baby arrives?
      Do you have a partner?
      You are renting? Don’t own a car worth over 2k?
      Have you looked at what your finances will be like when you go back to work, factoring in child care costs

      Reply
    • Sara (Debt Camel) says

      January 4, 2022 at 11:42 am

      I am asking all these questions to get a better idea if a DRO is a possible option for you.

      Reply
  22. Jason P says

    February 7, 2022 at 12:40 am

    Hi Sarah,
    I had a DRO end about 3 years ago and all but one of my debts have disappeared off my credit records. Experian shows it correctly as Default/Ended and closed but Equifax and TransUnion show it as default and open.
    Do I need to get in touch with them or will the account disappear after 6 years along with the DRO marker?
    Thank you

    Reply
    • Sara (Debt Camel) says

      February 7, 2022 at 8:30 am

      If the default date on Equifax & TransUnion is on or before the start of the DRO, the debts will drop off those reports after 6 years.

      You can live with them showing as open until then if you want. Or ask the creditor to correct the Equifax and TransUnion report as they are wrong – see https://debtcamel.co.uk/repair-credit-record-dro/.

      Reply
  23. Alvii says

    February 15, 2022 at 10:16 am

    After failing joint iva due to reduction in income ( going from 1300wage to sick pay 96 per week), and cant afford to pay it anymore, am i allowed to sell the car as its the only asset i have at the moment? Use the money to support household( wife on uc and 2 small kids) , and then head into 2 separate dros to which we qualify in term of other aspects

    Reply
    • Sara (Debt Camel) says

      February 15, 2022 at 10:19 am

      you don’t need the car?

      Reply
  24. Nicholas says

    April 11, 2022 at 8:00 am

    My debt relief order was granted in 2017 and all the included debts are now either marked as satisfied or settled. My only concern is that the included debts are showing missed payment markers on my credit report. I was informed to notify the creditors that was in the process of a debt relief order, is it right that these should appear as missed payments?

    Reply
    • Sara (Debt Camel) says

      April 11, 2022 at 10:33 am

      Have the included debts had a default date added? Was the default date the same as your DRO date (or earlier)?

      Reply
      • Nicholas says

        April 17, 2022 at 3:38 pm

        The default dates are the same as my DRO March 2017 and the end dates are March 2018. Anything between those dates are marked as defaults/missed payments.

        Reply
        • Sara (Debt Camel) says

          April 17, 2022 at 4:22 pm

          That sounds broadly correct.
          The possible exception being that all debts should have been marked as defaulted at the start of the DRO and so no missed payments should have been recorded after that, just more defaults.

          Reply
  25. Nicholas Florides says

    April 17, 2022 at 4:52 pm

    Thankyou, happy easter.

    Reply
  26. Marie says

    May 3, 2022 at 7:04 pm

    Hi Sara

    I have a DRO that finishes at the end of July this year. Most of the accounts subject to the DRO are now showing on my credit file as defaulted (albeit some are the wrong dates but I will sort that!) but two of them aren’t – one account is just saying ‘in arrears’ (8 payments behind) and still generates statements although I’m not asked for any payments and the other is showing as active and up to date even though I’m not paying anything and not being asked for anything and also generates a monthly statement?! (It’s just slightly over the credit limit) Both these companies are aware of the DRO hence them not chasing me for payment but do I need to ask them to default my accounts like the others or is it ok to leave them as they are and wait til everything is written off at the end of July?

    Reply
    • Sara (Debt Camel) says

      May 3, 2022 at 7:42 pm

      I would wait until several months after your DRO has ended and at that point ask the creditors to add a default date of your DRO and also marke the debt as settled or partially settled. See https://debtcamel.co.uk/repair-credit-record-dro/

      If you try to sort the default out now, you may have to go back and sort the settlements out later. Easier to wait.

      Reply
      • Marie says

        May 8, 2022 at 1:40 pm

        That’s great thank you Sara

        Reply
  27. David says

    May 12, 2022 at 3:12 pm

    Hi Sara,

    Will a £3000 backdated benefit payment for limited capacity for work and work related activity from August 2019 prevent me from applying for a DRO? I no longer have the money and used most of it to replace twenty plus year Old white goods. Though I also bought a new TV.

    Reply
    • Sara (Debt Camel) says

      May 12, 2022 at 6:01 pm

      I think that may well be OK. It was a long while ago and it sounds as though you used the money for essentials.
      I suggest you talk to a National Debtline on 0808 808 4000 about this.

      Reply
  28. Marie says

    May 26, 2022 at 1:06 pm

    Hi Sara
    Like a lot of people I’ve just read with interest the government plans to help those most in need with automatic one off payments to help with the cost of living. My full income is from benefits (with actually about a 70 pounds deficit on income and expenditure already every month) so I would qualify for this help but I am also in a DRO that ends at the end of July this year and am now getting concerned that these payments will class as windfalls? Do they allow for things like this, being that they are compulsory government payments to help with moving costs and will obviously apply to millions or do these still class as windfalls to be declared and therefore may possibly affect the DRO? I’m desperate for the financial help but I’m so close to the finish line and would be just awful to have my DRO overturned now, so I’m a bit worried!

    Reply
    • Sara (Debt Camel) says

      May 26, 2022 at 9:36 pm

      I expect that these payments will be disregarded for DROs. During the pandemic when Universal Credit was raised £20 a week the Insolvency Service DRO Unit said people in a DRO did not have to inform them about this.

      In any case, your DRO ends in July, by then only the first half of the £650 payment to people on benefits will have been paid and that is too low to affect a DRO.

      Reply
  29. Mario says

    June 9, 2022 at 4:09 pm

    This is a bit odd, probably means nothing as the debt is on the DRO, Lowell has set the default date of one of my debts to the exact same day as the DRO started. Bit odd but not really bothered, only 2 weeks exactly to go before the DRO moratorium ends. Plus over the past 6 months my credit rating has been going up and down like a yoyo. On Credit Karma one month its up 40 points the next its down by 60. Again, I am not really bothered but its facinating how they come up with these seemingly random numbers even though my financial situation is exactly the same as it was when I started the DRO. No better, bit worse but coping.

    Reply
    • Sara (Debt Camel) says

      June 9, 2022 at 4:44 pm

      Lowell has set the default date of one of my debts to the exact same day as the DRO started.
      this is exactly what they should do, unless there was an earier default date, in which case they shouldn’t have changed it.

      See https://debtcamel.co.uk/repair-credit-record-dro/

      Reply
  30. Lee james says

    July 8, 2022 at 6:32 pm

    Hi Sara,

    I have a dro which was recently approved, when I applied for the debt relief order I was unemployed. I now have an opportunity to work self employed. I would choose to work part time and only earn roughly £100 a week. Would this be a problem if I took this and let the Insolvency know?

    Thanks

    Lee

    Reply
    • Sara (Debt Camel) says

      July 8, 2022 at 7:44 pm

      It depends what your expenses would be. I suggest you ask the adviser that set up your DRO.

      Reply
      • Lee james says

        July 9, 2022 at 1:20 am

        Ok thank you

        Reply
  31. Anon1 says

    July 23, 2022 at 8:03 am

    Hi there,

    My partner has been trying to get a DRO approved and is now being asked to provide values for all her assets, due to the £2k asset limit. She is an avid gamer and disabled so has a lot of computer stuff and peripherals for entertainment and keeping busy and that is what she has spent a fair percentage of her own money on (her income is entirely benefits)

    Will the values she comes up with for these items be looked into and if it does go over £2k even at a conservative estimate (we’ve never generally had much luck selling our stuff second hand for very much), is it ok for her to try to sell some stuff and then apply for the DRO?

    Reply
    • Sara (Debt Camel) says

      July 23, 2022 at 9:39 am

      The values she should provide are a realistic price she could sell them for eg on eBay. It’s often not a lot even for nice tech kit.
      I suggest she makes a list of the items and the value.
      If she has heaps of stuff she no longer needs, she can sell some and should keep a record of the money she gets. She can’t sell a 3 month old MacBook to her sister for £25…

      Reply
      • Anon1 says

        July 24, 2022 at 2:55 am

        Thank you, is there an amount below which it’s not necessary to declare an item as an asset? I.e. small electronic items like smart speakers etc?

        Reply
        • Sara (Debt Camel) says

          July 24, 2022 at 10:37 am

          Who is asking you to list this – your debt adviser? I think you should ask them this.

          Reply
  32. annon says

    July 26, 2022 at 1:32 pm

    i was approved for a DRO in January and this clearly shows on my credit file , a particular company with different brands was included in this DRO , fast forward 7 months and i was searching around the internet and i know it is not great found a credit catalogue, unknown to me until now that they are the same company that was in my DRO just under a different brand i had never heard of , they have given me £150 credit and I have used some of it for my daughter birthday, I know the rules that I am under in the 12 months after the DRO and as far as am aware this amount does not breach that.

    the issue is surly the same company should not of approved me anyway, and yes if I new it was the same company under a different brand i would not of applied , I was just really desperate for my daughter.

    Reply
    • Sara (Debt Camel) says

      July 26, 2022 at 3:28 pm

      The DRO rules say that while you are in the DRO year you can’t get credit for £500 or more without telling the lender that you have a DRO. This was for less than that so, as you say, you have not broken the DRO rules.

      The lenders is allowed to give you credit. It has to be “affordable” for you, but for such a small credit limit, with presumably a small monthly repayment, this probably would not break those rules.

      I know it’s hard living without any credit. If you are getting UC or other benefits you may get an extra £326 this month to help with the cost of living crisis. Could some of that pay off this catalogue and you could close the account? Because the interest on them is horrible.

      Reply
  33. AJ says

    August 6, 2022 at 10:21 pm

    Hello,
    Who does the official receiver notify when you are approved for a dro? Do they write to all of your bank account providers and your employer? Would they tell your landlord? None of my bank accounts or rent needs to be included in the dro as they are not in arrears.

    Reply
    • Sara (Debt Camel) says

      August 7, 2022 at 7:11 am

      See https://debtcamel.co.uk/dro-applications-faqs/ which answers these questions and a lot of other ones about setting up a DRO.

      Reply

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