A Debt Relief Order (DRO) is often the best debt solution if you have under £30,000 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? which looks at the eligibility criteria and how to apply for an overview. Here are some common questions I hear about … [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.
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...]
You can't have a Debt Relief Order (DRO) if you own a car that is worth more than £2,000. But what happens if the car is on HP? A reader, Mrs T, asked: I am drowning in debts and only just under the £30k 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 £30k. I … [Read more...]
The rules about who can have a Debt Relief Order (DRO) were relaxed on 29 June 2021. You can now qualify for a DRO with debts of up to £30,000 and you are allowed more assets and more spare income. It is estimated that an extra 13,000 people a year who are renting will now apply for a DRO because of these changes. Many people who currently have a Debt Management Plan (DMP) or have payment … [Read more...]
In 2021 the rules about who can have a Debt Relief Order (DRO) were relaxed so a lot more people qualify. For example, under the old rules your debts had to be less than £20,000 - now they can be up to £30,000. The Insolvency Service thinks an extra 13,000 people a year may now qualify for a DRO. Are you one of them? If you are in an IVA, you are renting and your IVA payments are less than … [Read more...]
UPDATE 10 May 2021 The Insolvency Service has announced the new limits that will be introduced for Debt Relief Orders (DROs) from 29 June 2021. These are: the total debt allowable in a DRO goes up from £20,000 to £30,000. the level of "surplus income" after paying your bills and everyday expenses has been increased from £50 to £75 per month. an increase in the general assets you … [Read more...]
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...]
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...]
Ms G asked: I have about £18,000 of debts which I can't afford to pay after my partner left. I am part-time at work, with very little money and renting, but I have been told I will be made redundant in November. I should get about £2,500 redundancy pay and I will need that while I look for a proper job - I won't get Universal Credit straight away. So is it best to wait and apply for a Debt Relief … [Read more...]
A reader asked: I’m a single parent and have had about 10k of debts in a debt management plan for several years. I’m on low income and it looks like it will never end plus I have got some further debts. Now I’m considering a Debt Relief Order (DRO). But I met someone and I’m thinking about starting to live together. I don’t want to tell him about my debts and really want to sort this out … [Read more...]