What is a Debt Relief Order and how does it work?

Posted 30 April 2019

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In the ten years since Debt Relief Orders (DROs) first began, they have helped more than a quarter of a million people in the UK out of debt. So what is a Debt Relief Order? And could it be a suitable solution for you?

What is a Debt Relief Order?

A DRO is what’s called an insolvency solution, which means it is designed for people who aren’t able to pay off their debts in a realistic timescale. It’s one way you can have your debts written off - if you meet certain eligibility criteria.

If you are approved for a DRO, your debt repayments and interest are frozen for 12 months. Your creditors included in your DRO won’t be able to contact you or ask you to repay the debts during that time.

If your financial situation hasn’t changed at the end of this period, all of the debts included in your DRO are written off. However, DROs don’t cover every type of debt. So you’ll still be responsible for paying off the debts that weren’t included.

Am I eligible for a Debt Relief Order?

DROs are designed for people on lower incomes and with a relatively low level of debt and few assets.

The Debt Relief Order income limit

The limit is actually based on your disposable income, or DI. To qualify for a DRO, you must have less than £50 DI per month after paying your household bills and living costs. You must prove that you are unable to pay your debts.

Debt Relief Orders and assets

Crucially, you can’t have a DRO if you’re a homeowner. You must also have less than £1000 in savings and assets. You won’t be eligible if your car is worth more than £1000 (unless it’s been specially adapted because you have a disability).

How much debt can I have with a Debt Relief Order?

To qualify for a DRO you must have unsecured debts of less than £20,000. Some debts cannot be included in a DRO and do not count towards this limit. These include child support, student loans, social fund loans, and debt related to criminal activity, such as magistrate's court fines.

What else?

To get a DRO you need to live in England, Wales or Northern Ireland: they’re not available in Scotland. There’s a similar Scottish solution called a Minimal Assets Process (MAP) bankruptcy. The benefits, risks and fees involved in this solution are different - take a look at our Scottish debt solutions page to find out more.

To qualify you will also need to confirm that it's been at least 6 years since any previous DRO was made, and that you’re not going through bankruptcy or an individual voluntary arrangement (IVA).

What are the advantages of a Debt Relief Order?

  • You won’t have to pay anything towards your debts for 12 months.
  • Your creditors won’t be able to pursue you during that time.
  • At the end of a year - assuming your finances haven’t improved - the debts included in your DRO will be written off.

For those able to apply, it can be a cheaper alternative to bankruptcy. The fee is £90, compared to £680 to go bankrupt. And although a DRO is a formal debt solution, you won’t have to go to court.

What are the disadvantages of a Debt Relief Order?

As the eligibility criteria make clear, DROs are not available to everyone.

A DRO also involves paying a one-off fee of £90 to the Insolvency Service. This must be paid before your application can be submitted. Unlike with the fees for bankruptcy, there are no discounts or exemptions available for this. And you can’t get your money back once you’ve submitted your application, even if it is rejected. However, you can usually pay in instalments, and there may be charitable help available.

Like other insolvency solutions, a DRO will appear on a public register. And like all debt solutions, it will negatively affect your credit report. A DRO will stay on your credit file for six years from the date it is approved. You’ll find it harder to get new credit during this time.

How do I apply for a Debt Relief Order?

You can only apply for a DRO through an expert DRO adviser called an approved intermediary. If the intermediary agrees that you qualify for a DRO, they will help prepare your application. Once you have paid the £90 fee, they will submit your application to the Insolvency Service for you. The Insolvency Service may reject your application if you’re not eligible. But your approved intermediary will not submit your application until they’re sure that you are.


We hope this has helped answer some of the most common questions about Debt Relief Orders. You can find more information - including on how to find an approved intermediary and check that you’re eligible - on the debt solutions page of our website.

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.