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What effect will a Debt Relief Order have on me?

Debt Relief Order | Guide

There are some things you must – or must not – do once you've actually entered a DRO.

Borrowing money

You can’t obtain credit worth £500 or more without telling the lender that you're going through a DRO during the first 12 months of the order. This restriction also applies to:

  • applying for credit with someone else
  • 'acting with the intention' of getting credit – for example, ordering something without asking for credit, but failing to pay when it arrives

Bank accounts

You also have to tell your bank/building society that you're subject to a DRO before applying for an overdraft facility during the first 12 months. And you mustn't write cheques that are likely to be dishonoured. You can open a new bank account, building society account, or an account with an alternative provider, although they may ask you whether you're subject to a DRO. They may decide not to let you open an account, or may offer you a basic bank account instead.

If you have an existing current account, we’d recommend that you speak to your bank about how this would be affected by insolvency – especially if you are including an overdraft as part of your DRO.

Carrying on a business

Entering a DRO can have an impact on the way you work. If you carry on a business under a different name (one that's not the same as the one you were granted a DRO under), you'll have to make things clear to everyone you're doing business with – and tell them the name you were granted your DRO under.

You also can't be involved with the 'promotion, management or formation' of any limited company – or act as a company director – without getting permission from the court first.

Credit ratings

Your credit rating will also be seriously damaged. Your DRO will be recorded on your credit file for six years from the date that you take a DRO out. During this time, and potentially afterwards (you may be asked in future applications if you have ever been insolvent), it's likely that you'll find it harder or more expensive to borrow money.

If you qualify for a DRO, it’s likely your credit history will already be affected, perhaps by CCJs or defaulted payments. Leaving your debt problem to get worse will have its own potentially serious consequences for your credit history, so you may decide it’s worth taking a hit on it now and starting to work towards turning your finances around.


You could be affected by the restrictions described above for longer than the year of your DRO if the ‘Official Receiver’ deems it necessary. The Official Receiver is the officer of the court who's responsible for assessing your DRO application, then administering your DRO if it goes ahead.

If they believe that you've been dishonest (either before your DRO or once it's underway), or behaved irresponsibly, they might decide to apply to the court for a Debt Relief Restrictions Order (DRRO).

If the court makes the DRRO against you, the restrictions on your behaviour while you’re in a DRO would continue to apply for much longer – this could be any period of time between two and 15 years.

Next: Will a Debt Relief Order damage my credit rating?

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