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What happens if your DRO is revoked?

Posted 28 November 2019

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A Debt Relief Order (DRO) will have a positive impact on your household’s finances, allowing you to clear your unsecured debts in just 12 months. If your DRO is a risk of being revoked, you’ll want to take every step to try and avoid that.

You’ll be notified if your DRO is at risk and the reasons why. We’ll take you through the common reasons DROs get revoked and what you can do to appeal the decision.

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Why are DROs revoked?

The qualifying criteria for a DRO is strict. As a result, a small change in your circumstances during the year that your DRO is in place could take you out of the qualifying criteria and lead to your DRO being revoked.

There are three common reasons why DROs are stopped.

  1. Reason 1. Your circumstances change taking you out of the qualifying criteria
  2. Reason 2. The information you supplied at the beginning of DRO wasn’t accurate
  3. Reason 3. You didn’t comply with the restriction set down by the Official Receiver

Reason 1

If your circumstances have changed, it could mean that you don’t fall within the qualifying criteria anymore. Here is the criteria to qualify for a DRO:

  • • You don’t have assets or savings over £1,000
  • • You are not a homeowner
  • • Your disposable income is under £50
  • • Your debt level is under £20,000

 

If one of these now doesn’t apply to you, it could be the reason your DRO is being revoked. For example if you get a new job or a pay rise and your disposable income increases over £50 a month then you would no longer qualify for your DRO.

Reason 2

Whether through an oversight on your behalf, or by illegitimate means, if the Official Receiver discovers your circumstances aren’t what they believed them to be, they could revoke your DRO. Some reasons could be as follows:

  • • You gave away an asset in the past 2 years
  • • There was information missing about your debts, assets, or income in your application

Reason 3

At the beginning of the DRO the Official Receiver might lay down restrictions. If you don’t follow these restrictions then your DRO will be at risk.

The Official Receiver may also apply for a Debt Relief Restriction Order (DRRO). This can be an extension to your restrictions while still going ahead with revoking your DRO.

 

What happens when your DRO is revoked?

If your DRO is going to be revoked you will be notified in writing - a letter will also go to your creditors. The letter will tell you the date from which your DRO will be revoked, the reason why it’s going to be revoked, and how you can challenge the decision.

How to challenge your DRO being revoked

The best way to challenge your DRO being revoked is to speak with the organisation you used to apply for your DRO. Give them a call and go over the reasons why you think the Official Receiver has made a mistake. They’ll be able to help you put your case forward.

What to do if you DRO is stopped

If your DRO stops it can have a big impact on your household. Overnight you go from no unsecured debt repayments to your creditors chasing you again. If you’ve had a DRO you’re likely to be familiar with the debt advice process. It’s probably worth speaking with the organisation that completed your DRO application, or another company authorised to give debt advice. You can see what options you have now your DRO has been revoked.

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.