Debt Relief Orders are available in England, Wales and Northern Ireland

If you live in Scotland, the equivalent is MAP (Minimal Asset Process) Bankruptcy.

A Debt Relief Order (DRO) is an alternative to bankruptcy for people who are unable to afford any of the other available debt solutions or even to petition for their own bankruptcy. Currently, petitioning for your own bankruptcy can cost around £700, but with a Debt Relief Order, it will only cost £90.

Criteria you must fulfil for a Debt Relief Order

For England & Wales

  • Owe under £20,000
  • You must not own a property
  • You must be unable to afford your current repayments to your unsecured creditors
  • Have less than £1000 in assets (excluding vehicle, only non-essential items which can be easily sold are considered)
  • You can still own a vehicle but this must be worth less than £1,000, unless it has been specially adapted because you have a disability
  • Your monthly disposable income should be less than £50, after paying your usual household expenses
  • Don’t see your situation improving
  • You are unable to have had a DRO in the last 6 years
  • You cannot be involved in any other form of insolvency, for example, an IVA
  • You need to have lived, owned a property, or worked in England and Wales in the last 3 years.

For Northern Ireland

  • Owe under £15,000
  • Have less than £300 in assets (excluding vehicle)
  • You must not own a property
  • Have a vehicle worth up to £1,000
  • Have less than £50 per month spare
  • Don’t see your situation improving
  • You are unable to have had a DRO in the last 6 years
  • You cannot be involved in any other form of insolvency, for example, an IVA
  • You need to have lived in the last 3 years.

Things you need to know

  • To apply for a DRO you need to go to a DRO adviser
  • If you are unable to afford the £90 cost of the DRO, you may be able to obtain assistance from some charities
  • The £90 cost can be paid in one lump sum or it can be spread across 6 months if preferred
  • Once the application and cost has been submitted to the Insolvency Service, the payment cannot be returned even if your application is rejected or a DRO stops before completion

Some debts cannot be included in the DRO and you will still be liable for them. These debts do not count towards the £15,000 limit (£20,000 from 1 October 2015).  These include:

  • Child Support Agency arrears
  • Claims against you for damage or personal injury
  • Criminal fines
  • Fraudulent debts
  • Magistrates’ court fines
  • Social fund loans
  • Student loans
  • TV Licence arrears
  • The DRO will be detailed on the Individual Insolvency Register (which can be viewed online) whilst the DRO is active and for 3 months after the DRO completes
  • The DRO will be on your credit file for 6 years
  • You will not be able to obtain credit of £500 or more without telling the lender about the DRO
  • If you carry on a business under a trading name which is different from that under which you started the DRO, you must tell all those with whom you do business the original trading name
  • You may not be involved with the promotion, day-to-day management or formation of a limited company without the Court’s permission