What is a Debt Relief Order and how does it work?
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Thinking of taking back control of your debts with a DRO, find out if your job will be affected here.
Feeling like you’ve got so much debt you can’t cope is not a good place to be. And one way you can look at easing some of the burden is to think about a debt solution. One of the more recent debt solutions available is the Debt Relief Order (or DRO for short) - and the good news is that from 1st October 2015 the DRO rules have been changed which should mean that thousands more people will be able to use them to help tackle their unmanageable debt.
But before you make any decisions about which way you’d like to move forward, there are a few things you need to think about. One of the most important is how entering into a DRO will affect your current job and any future career plans you may have. Thankfully in most cases it won’t, but if you are planning on a very specific career path, in banking or the police for example, then a DRO may not be the best solution for you as you may find some doors shut to you if you enter into a DRO.
So, before making any recommendation about the best debt solution for you, your debt advisor will ask you a series of questions about your current job, who you work for and what you’d like to do in future. If it turns out that entering into a DRO would make it tricky for you to follow your chosen career, your advisor will suggest an alternative.
What jobs can a DRO affect?
DROs will only affect certain jobs in certain sectors. The sectors most likely to be affected are those in finance. Another area that may be affected is working in security or other public service areas, such as the police and the army. This is to help protect you from being put into a compromising position. And if your job requires you to be a member of professional or licenced body, you may find that entering into a DRO makes you ineligible for membership, which will prevent you from practising as well.
Being a company director might be affected too. If you decide to carry on another company, using a different name – not the one you were using when the DRO was granted – you will have to make it clear to all those you trade with. This is so that there’s no confusion later down the line.
Being involved with the 'promotion, management or formation' of any limited company, or acting as a company director, without getting permission from the court first, is also forbidden. However, once your DRO has ended the restrictions will be lifted and you’ll be free to work in whatever sector you like.
Do I have to tell my employer if I have a DRO?
Unless you work in one of the sectors we’ve already discussed above, there’s really no reason why you should tell your employer – it’s your business after all. However, if you’re unsure in any way, it’s best to check your contract of employment for a clause that states you have to inform them if you are entering into a debt solution, or speak to your company’s HR department. And, of course, we would always advise that you are honest with your employer.
What happens if my income rises while I’m on a DRO?
If your income rises while you are on a DRO, you should tell your debt advisor as soon as it happens. It may be that the rise in income will mean you are no longer eligible for a DRO and it will be revoked, which basically means it will be cancelled. If this happens, there’s no need to worry, you’ll be advised on other debt solutions that are appropriate.
If you want more information about how DROs work, as well as their pros and cons see our detailed guide here. If you would like personalised, confidential advice why not contact the Money Advice Service, or speak to one of our advisors by choosing one of the ‘contact us’ methods on the left of this page.
by Shelley BowersBack to blog home