A Debt Relief Order (DRO) is a simple and cheap alternative to bankruptcy if you are renting and have little money to spare each month to repay debts. A DRO lasts for 12 months and during this time you must inform the Official Receiver (OR): if you receive any money or other assets, or if your income increases. If this happens, the OR may 'revoke' your DRO. That is the legal term … [Read more...]
Articles on Debt Relief Orders (DROs)
See What is a Debt Relief Order (DRO) for an overview.
That lists the conditions for getting a DRO - your total debts have to be less than £30,000), you can't own a house etc. It looks at what happens in the "DRO year" - you don't have to make monthly payments and at the end your debts are cleared.
If your debt problem is serious and you meet the DRO criteria, a DRO is very often the best possible solution for you.
DRO applications – frequently asked questions
A Debt Relief Order (DRO) is often the best debt solution if you have under £50,000 of debt, you are renting and you have hardly any spare money to repay your debts. You don't have to make any payments in a DRO and, after a year, your debts are wiped out. See What is a DRO? for an overview. This looks at the eligibility criteria and how to apply for a DRO. Here are some common questions … [Read more...]
DROs – major improvements introduced in 2024 Spring Budget
In a Spring Budget that was short on surprises, the Chancellor pulled a large rabbit out of the hat for debt advisers and some of their clients - big changes to the rules for Debt Relief Orders (DROs). DROs are a form of insolvency for people who have little or no spare income to be able to make any payments to their debts and who only have low assets. Introduced 15 years ago, they were … [Read more...]
The new DRO hubs – what happened in 2023
In January the Insolvency Service published data showing how the volumes of Debt Relief Orders (DROs) done by advice agencies changed in 2023, see Monthly IS statistics Jan-Dec 23, Table 3.2. In February 2023, the two new MaPS-funded DRO hubs began operating. These are run by Citizens Advice and Money Wellness (called Benesse Advice in the IS statistics, also known to debt advisers as Gregory … [Read more...]
DROs – what if you have a car on HP?
You can't have a Debt Relief Order (DRO) if you own a car that is worth more than £4,000. But what happens if the car is on HP? A reader, Mrs T, asked: I am drowning in debts and only just under the total DRO debt limit. I have been advised that a DRO would be my best option. However I didn't tell the debt adviser that I have a car on HP which I still owe £7k as this would take me over the … [Read more...]
Thousands should switch from DMPs to a DRO after rule changes
UPDATE The rules about who can have a Debt Relief Order (DRO) changed in 2021 and more changes are coming in June 2024. From that date you can qualify for a DRO with debts of up to £50,000 and the permitted value of a car you can own is being doubled to £4,000. Thousands of people who are renting will now be eligible to apply for a DRO because of the 2021 and 2024 changes. Many people who … [Read more...]
Should I end my IVA and change to a DRO?
In 2024 the Debt Relief Order (DRO) rules have been relaxed so a lot more people qualify. For example, the maximum limit of debts in a DRO has now been increased to £50,000 and you can also own a car worth up to £4,000. Will you now qualify for a DRO? If you are in an IVA, you are renting and your IVA payments are less than about £120 a month, you may be much better off switching from an IVA … [Read more...]
Good news – higher DRO limits from end June 2021!
UPDATE 2024 In the budget in March 2024, new changes to DRO limits and an abolition of the DRO fee were announced. These increase the total allowable debt in a DRO further to £50,000 and double the increases in the value of a car allowed to £4,000. The full DRO eligibility criteria are set out in What is a DRO UPDATE 10 May 2021 The Insolvency Service has announced the new limits that … [Read more...]
What happens at the end of a DRO?
A Debt Relief Order (DRO) lasts a year. This is sometimes called "the moratorium period". At the end of this year, all the debts that were included in your DRO are wiped out. You aren't contacted at the end of the DRO year There is no "DRO Completion" check made at the end of this year. Not by the Insolvency Service and not by the debt adviser who set up your DRO. You won't be asked to … [Read more...]
How to improve your credit rating after a DRO
A Debt Relief Order (DRO) lasts for one year and then your debts in it are wiped out. But it shows on your credit record for six years. This article looks at what should happen to your credit record during the DRO year and after it has finished. Some of your creditors may have go tt this wrong, you need to ask them to correct any problems. You can start to improve your credit rating after … [Read more...]