What is a Debt Relief Order and how can it help?

It's an alternative to bankruptcy that is only available to people with a very low disposable income and few assets to contribute towards their debts.

It works by suspending all repayments, interest and charges on your unsecured debts for 12 months, and if your situation hasn't improved sufficiently by the end of that time, those debts will be written off.

While a DRO is in place, your lenders will not be allowed to take any further action regarding the debts involved in the DRO.

How do I know whether I qualify for a DRO?

You'll only be eligible for a Debt Relief Order if you genuinely can't afford to repay your unsecured debts within a reasonable period of time. You must also meet the following criteria:

• Your unsecured debts must come to no more than £15,000
• Your monthly disposable income must be less than £50
• Your assets musts be worth no more than £300 in total (excluding a car, which can be worth up to £1,000)
• You must not have entered into a DRO in the last six years
• You must not be going through any other insolvency proceedings

If you're not sure whether you qualify, feel free to ask one of our expert advisers on 0800 195 2714, or fill in the callback form at the top of the page and we'll get back to you.

How can I apply for a DRO?

You can only apply for a DRO through an approved intermediary (in other words, a company with the necessary permission to handle applications). Simply call us on 0800 195 2714 and we'll help you with your application.

Unlike bankruptcy, there is no need to go to court to apply for a DRO - we can take care of it over the phone. It also costs much less than a typical bankruptcy - there's a £90 application fee, which can be paid in instalments if necessary. Applying for bankruptcy can cost up to £700.

Do I have to make any payments on a DRO?

Once a Debt Relief Order has been agreed, all payments on your unsecured debts will be stopped. The only payment you'll make is the one-off application fee of £90.

If your situation improves significantly during your DRO, it will come to an end and you will start making normal payments again. If you are still unable to repay your debts by the end of the 12 months, the debts will be written off.

Will being unemployed affect my DRO application?

No. When you apply for a DRO, only your ability to repay your debts is taken into consideration (along with the other eligibility criteria). Whether or not you are employed isn't a factor.

A Debt Relief Order could be an ideal debt solution if you're unemployed, because it doesn't require regular payments. However, if after finding work you are able to repay your debts as normal, your DRO will come to an end.

What are the downsides of a DRO?

It's important to remember that a Debt Relief Order is an insolvency solution that is only available to people with very serious debt problems. As such, there will be a big impact on your credit rating, with records remaining on your credit history for six years.

But not getting help with your debts could have even more serious consequences - so don't hesitate to contact us if you're struggling.