Although many of us face debt in our lives, not one situation is the same. Our expert team are here to listen to your circumstances in order to conclude whether a Debt Relief Order is best for you.

Life is unpredictable and it may be that you find yourself in a position where you are unable to pay your debt within the time and at the amount that you previously agreed. In some cases, it may be that your debt and repayments are leaving you with little to no money. No one’s debt should disable their life, and that is why MoneyAdvice are here to offer solutions to help take hold of your finances.

For those truly struggling, a Debt Relief Order may be the next step. A cheaper alternative to Bankruptcy, a Debt Relief Order will give you peace of mind, freeze all of your debt and is cheaper when compared to Bankruptcy. Thanks to their experience, the MoneyAdvice team are able to discuss your current financial situation in great detail and quickly assess whether a Debt Relief Order is the best route for you.

What is a Debt Relief Order?

A Debt Relief Order or DRO is a debt solution in which, like Bankruptcy, puts all of your debt and scheduled repayments on hold. If you are eligible for a DRO and your applications are successful, your debt is frozen for 12 months and your original lenders are not allowed to contact you or pursue any amount of your previous repayments, giving you a chance to better your financial state and take a second to breathe.

After the 12 month duration of your Debt Relief Order, if it comes to our attention that your situation has not improved, then your unsecured debts will be made invalid. If your situation has improved or does improve throughout the period that you have a DRO, then it might be that your DRO is cancelled. Each solution is implemented with the main aim of helping you pay your debt in a way that will do nothing but benefit your circumstances.

How Does is a Debt Relief Order Work?

At MoneyAdvice, we are dedicated to finding the right debt solution for you. After discussing your current situation in great detail, thanks to our expertise we are able to quickly inform you whether a DRO is the best for your situation. If this has been concluded and your application for a DRO has been accepted, your debt is then frozen for the following 12 months. During this time, you pay nothing towards it, and no additional charges are put towards the original amount.

For this form of debt solution, it is only accessible via money experts like ourselves. If you believe that your circumstances would you make you eligible for DRO, click here to contact a member of the team today.

This particular solution is designed for those who have no means to pay their debt within the requirements that were previously agreed, and who also have little to no access to disposable income in which they could afford Bankruptcy.

A DRO is there to provide a stress-free solution to your debt struggles, without having to pay the fees that come along with Bankruptcy. Here at MoneyAdvice, we will be with you every step of the way to ensure that you are pursuing a process that puts you and your wellbeing at an advantage.

*Debt Relief Orders is available subject to eligibility and acceptance.*

What are the Steps?

1. Speaking with our MoneyAdvice Experts

Sitting down with a MoneyAdvice expert and discussing in detail your current situation will allow them to decide whether you match the criteria for a DRO. If your financial situation proves to be suited for a DRO, we will then proceed to the next step.

2. Your DRO Application Form

After you have been proved to suit a DRO, you will then have to fill out an application form made accessible by MoneyAdvice. We will provide any help you require and ensure that you understand every step of the process. Once filled in, the form will then sent to the Insolvency Service for assessment.

3. The Insolvency Service

Once the Insolvency Service has granted you your DRO, we will be in contact with your original creditors to inform them of the changes. For the following 12 months, they will not be able to demand repayments from you, and your debt will be written off.

4. 12 Month Review

After you the DRO’s 12 month period has ceased, your financial situation will be reviewed. If it has not improved and you are still not in a position to pay, your outstanding debts will be then made invalid. If things have improved either during or after the 12 months, then your DRO will be cancelled.

Am I Eligible for Debt Relief Order?

Similar to Bankruptcy, a Debt Relief Order is a debt solution which is used in the direst situations. It is an option given to those who can’t afford to go Bankrupt, have very little to pay off the debt, and has no remaining expenditure in which they would use for life’s essentials.

If any of the following aspects seem familiar, be sure to contact MoneyAdvice to discuss your options:

  • Your disposable income post debt repayment is £50 or less
  • You do not have a mortgage or own your residence
  • You do not owe more than £20,000 in unsecured debt
  • You cannot make the minimum payments offered by your original creditor
  • You do not own any assets with a value of over £1000
  • Your car, if you own one, has a value of less than £1000

Find your solution to debt

If you are unsure of what solution is best for you, click below to read more about alternative Debt Solutions and find the right one for you.

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How Will a Debt Relief Order Help Me?

Cheaper to implement than  Bankruptcy, a Debt Relief Order is especially for those who are not only struggling to pay their debt but have little to no disposable income. Costing £90, available to be paid through a manageable plan, it’s directed at those who need that 12 months to help improve their monetary circumstances. Writing off your debt and repayments for up to a year, it gives those truly struggling the chance to relax, take a step back and assess their situation with a clear head. We know how much stress this may evoke, so MoneyAdvice is here to make finding a suitable debt solution an easy process which gets you closer to the main aim – paying off your debt in a way that suits you.

A Debt Relief Order is a solution used usually as a last resort due to the impact it has on your future finances. Like Bankruptcy and other debt solutions, implementing a DRO will considerably affect your credit rating up to six years after it has been put into action, as well as being included on the Insolvency Register.

 


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If you’d like to inquire about your own Debt Management Plan, click here to contact one of our friendly MoneyAdvice experts today.

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Debt Relief Order (DRO) FAQ

If you have £15,000 worth of debt or less, a Debt Relief Order (DRO) is an option to write of your debt, depending on the number and value of assets you have, as an alternative to bankruptcy. 

You can apply for a DRO if you have up to £20,000 worth of unsecured debt and less than
£50 of disposable income per month after you have paid your general living costs and priority bills. You should have assets with a value of £300, so you would not qualify if you are a homeowner.

Only unsecured debts can be included on a DRO, eg. Credit cards / loans / council tax arrears. 

Student loans, court fees and child support and maintenance cannot. Neither can any secured debt be included as technically you do not own the asset to which they are attached until the debt is paid, and the lender could repossess the item.

 

You would not be able to apply for a DRO if you are a homeowner as a mortgage is a secured loan and your assets must be worth £300 or less.

You have a 12 month period in which to improve your financial situation or apply for bankruptcy as an alternative.

Whilst under a DRO, you should not apply for credit exceeding £500. You must abstain from gambling, unnecessary spending or any other activities that could worsen your debt or got you into debt in the first place. 

You must also declare all your assets.

 

Initially, you may be given a warning or a court-enforced restriction may also be placed against you. You could be prosecuted if you purposely attempt or commit fraud and your DRO would be revoked, allowing your creditors to target you again.

A DRO only costs £90. This is non-negotiable and even if you cannot afford to pay this upfront, you can request to pay in instalments and proceed with the DRO once it is paid in full. 

 

Your credit rating will be greatly affected by a DRO (although, it may already be damaged from defaults on your payments.) After you have been under a DRO, it is likely that you would only be able to apply for a basic bank account. If your utility suppliers are one of your creditors then you will have to change suppliers once your DRO is complete.

You can not apply for two insolvency solutions simultaneously. If you have signed papers for an IVA, you have declared yourself to be insolvent, and you are not allowed a DRO if you have declared insolvency within the last six years.