Over our years of working within insolvency, we have been asked many questions by people in debt. For some a Debt Relief Order may be appropriate. When designing this website, we thought that it would be best to summarise those queries that have been raised most frequently. If you have a question that you would like to ask, please contact us. We will be happy to reply to you directly and keep this page updated.
I’ve never heard of a Debt Relief Order (DRO). What is it ?
Although not as well known as Bankruptcy or even an Individual Voluntary Arrangement, the DRO has been available since 2009 for people who have a specific level of debts and only minimal assets. Like Bankruptcy it allows a debtor to be discharged from debts they have no prospect of paying.
What are the exact criteria for a DRO ?
Currently, to be eligible for a DRO you must:
- owe £20,000 or less;
- after you’ve paid tax, National Insurance and reasonable household expenses, you have less than £50 spare;
- you’ve lived or worked in England or Wales in the past three years;
- your assets are worth less than £1,000 in total; and
- you haven’t already had a DRO in the last six years, you’re not already Bankrupt or in an IVA.
How is a DRO different to Bankruptcy ?
DRO’s are not available for anyone with an interest in a property, even if the property is currently in negative equity. The £1,000 limit for assets is their total gross (not net) value, although cars worth less than £1,000 are excluded.
What are the pros and cons of a DRO ?
Most importantly, usually after 12 months, you are discharged from your unpaid debts. Like any personal insolvency, a DRO will affect your credit rating and your name will be included on an online register. During the 12 months you will have restrictions on what you can and can’t do, like a Bankruptcy.
I’m owed money by someone who is in a DRO. What are my chances of getting it back ?
Minimal unfortunately. There is little prospect of there being sufficient money for anyone to be paid and you should write the debt off.
Who checks if the debtor told the truth on their application for a DRO ?
The Official Receiver may investigate if they decide to do so, or if a creditor makes an objection. The DRO may be revoked if the debtor has not given an accurate picture of their financial situation.
Something we’ve not covered yet ? Send us a query via our contact page and we’ll answer you and add it to this section too.