Tackling your debts

How to apply for a DRO

Posted 18 October 2016

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Learn about the application process for a Debt Relief Order.

If you’re considering a Debt Relief Order (DRO) as a way to deal with unsecured, unmanageable debts, you might be wondering what the application process entails. In this blog, we’ll look into the process in detail and also remind you of how the solution works. 

Get expert advice first of all

Before you set your mind on one solution over another, it’s important that you speak to a trained debt advisor first. They will go through your income and expenditure with you and speak to you about the other aspects of your life which may affect how best to tackle your debts. 

They will then go through the various options and explain why they may or may not be right for you. They will recommend the very best option for you and help you through the application process. 

Do I qualify?

To qualify for a Debt Relief Order (DRO) you have to have less than £20,000 in unsecured debts and have less than £50 in disposable income to put towards your debts each month. This rule is very important, as a DRO is designed for people who are struggling the most with their debts. 

Your assets (anything of value that you own) have to be worth less than £1,000 in total. The only thing that’s looked at separately is your car, and this also can’t be worth more than £1,000. If you own your own home you won’t be eligible for a DRO, you’ll have to look at another solution. 

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How do I apply?

You’re not able to apply for a DRO by yourself. You can only apply for one through an approved intermediary, such as Debt Advisory Centre. This means that the advisor has permission to recommend a DRO for someone and process the application for you. 

Just as with any debt solution, you may be expected to provide evidence to support what you’ve said in your application. For instance, your wage slips or benefits letters to prove your income, and bills and statements to prove what you’re spending on the different areas of your life. 

There is a cost to starting a DRO – it costs £90, which is a one off administration fee payable to the Insolvency Service. You can pay this all in one go or in instalments, but your application won’t be processed until it’s been paid in full. 

Once your application has been put together by your approved intermediary and the fee has been paid, it will be sent to the Official Receiver OR (this is an officer of the bankruptcy court). They will decide whether or not your DRO goes ahead, not your creditors. 

If your application is accepted, you’ll stop paying towards your unsecured debts and your creditors are not allowed to contact you for payment anymore. 

If the OR comes back and says they need more information, it’s really important that you send what they need or your application could be rejected. Your advisor should talk you through what you need to do if this happens. 

If it’s rejected, this doesn’t mean that you have to continue struggling with your debts. You’ll go back to your advisor who will look into other options for you. Although, it’s important to say that your advisor will only make an application if the likelihood is that it will be accepted. There is a very specific set of qualifying criteria for a DRO, and your advisor should make sure that you fulfil these before making the application for you. 

How can a DRO help me with my debt?

A Debt Relief Order works by suspending your payments altogether on your unsecured debts for a year. So you no longer have to continue paying towards them at all. If your circumstances improve within a year of the DRO being granted, then it would be revoked and you would need to look for an alternative way to deal with your debts. If your circumstances don’t change within that time, then your debts will be written off completely when the DRO ends. 

A DRO will be registered on your credit file and remain there for six years from the date that you start it, which means that any company that credit checks you within this time will be able to see that you were on a DRO. This means that you will either have to pay more in interest when you borrow, or that you won’t be able to borrow if a lender sees you as too much of a risk. 

You must keep paying certain bills

A DRO only has the power to suspend your payments on your unsecured debts, but there are certain bills you have to keep paying while your DRO is in place. These include your rent and utility bills. 

Hopefully, that’s clarified how the application process works when it comes to DROs. It works differently with the other solutions, just click the link to learn more about them. You can use any of the options at the bottom of the page to speak to a trained debt advisor today. 


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.