Debt Relief Order
What is a Debt Relief Order?
A Debt Relief Order - DRO is a court order designed to act as an alternative to bankruptcy for those people who owe less than £12,000 but have no realistic ability of being able to repay their debt.
A debt Relief Order is designed to offer help to the poorest members of society, whose ability to repay their debt has been lost.
A Debt Relief Order has strict criteria which must be met before it can be put in place which are as follows.
- The applicant's debts must be below £12,000.
- There must be less than £50 monthly disposable income.
- There must be less than £300 assets owned by the applicant, excluding a car up to £1,000.
- The applicant must be resident in England or Wales, or for the last three years have been resident or carrying on business there.
- The applicant must not have an existing Bankruptcy Order, Bankruptcy Restriction Order or an IVA or have had a Debt Relief Order in the last six years
A Debt Relief Order has a basic administration cost of £90 which must be paid to the Official Receiver on application. This is substantially less than the cost associated with bankruptcy.
The name of the Debt Relief Order applicant will be added to the Insolvency Register, along side all bankrupts and IVA applicants.
The Debt Relief Order must be applied for through one of the few intermediary organisations, a list of which can be found at the Insolvency Service.
The order itself will last for 12 months and, at the end of that time, the debt owed will be discharged leaving the debtor completely debt free.
For further information on Debt Relief Orders please call an adviser on 0800 088 7502
