Debt Relief Orders ("DRO's")

DROs were introduced on 6 April 2009 and are suitable for people who do not own their own home, have little surplus income and assets and less than £20,000 of unsecured debt.  A DRO will be in force for 12 months after which time an individual will be freed from the debt providing that there has been no change in personal circumstances.  Creditors are unable to take any action to recover their debt whilst the DRO is in force.

DROs do not involve the Court and are run by the Insolvency Service in partnership with skilled business advisors.

Eligibility

You’re generally eligible if you meet all of these criteria:

• you owe less than £30,000
• have savings or valuable items worth less than £2,000 in total
• own a vehicle worth less than £2,000 (if you were to sell it today)
• do not have enough money left at the end of the month to make your debt repayments
• have lived or worked in England and Wales in the last 3 years
• are not currently bankrupt, have an interim order or an individual voluntary arrangement
• have not had a DRO in the last 6 years

Restrictions

You must follow rules called ‘restrictions’ if you get a DRO.

This means you can’t:

• borrow more than £500 without telling the lender about your DRO
• act as the director of a company
• create, manage or promote a company without the court’s permission
• manage a business without telling those you do business with about your DRO

If you want to open a bank account, you may also have to tell the bank or building society about your DRO.