DRO

A Debt Relief Order (DRO) is a form of insolvency which is designed to help people who have relatively low debt. We work closely with one of the few companies certified to supply this type of debt relief.

Debt Relief Orders were established in April 2009 by Government Legislation to be a simplified, quicker and cheaper alternative to bankruptcy in England and Wales. They are suitable for debtors who have few or no assets (less than £300 and not homeowners) and little disposable income (less than £50 per month). It is possible to apply for a DRO without attending court and a fee of £90 is charged.

Debt Relief Orders are intended to provide help for people in England and Wales if:

  • The debtor is unable to pay his/her debts
  • The debtor’s total unsecured debts do not exceed £15,000
  • The debtor’s total gross assets do not exceed £300 (this includes houses so homeowners will not be eligible); a car if it is worth less than £1000 can be excluded or it has been adapted for them because they have a physical impairment that has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities
  • The debtor’s disposable income does not exceed £50 per month
  • The debtor must have lived in England and Wales for the last 3 years
  • The debtor must not have previously been subject to a DRO within the last 6 years
  • The debtor must not be involved in another formal insolvency procedure at the time of application, such as:

Benefits of a DRO – Debt Relief Order:

  • Protection from enforcement by creditors included in the DRO
  • Be free from the debts included in the DRO usually within 12 months

Disadvantages of a DRO – Debt Relief Order:

  • Secured creditors are still able to take action against you once the DRO  – Debt Relief Order has been set up
  • It will affect your credit rating
  • Not all debts will be written off e.g. student loans, court fines, maintenance and CSA payments.
  • You cannot apply if you own your own home

 

How do I apply for a Debt Relief Order?

To get a DRO, you would need to apply to a debt management company/debt advisory as an `approved intermediary’; they are authorised (by a `competent authority`) to provide advice on DROs. They would help to advise you whether or not a DRO was the right kind of debt solution for you.

What happens if a DRO is approved?

The Debt Adviser would:

  • Provide details of the `duties imposed on you` while the DRO is in force
  • Notify all the lenders whose debts were included in the DRO
  • Enter your details in the Electronic Individual Insolvency Register (EIIR), noting that a DRO had been made against you.

While the DRO is in force, you must not make any payments direct to a lender included in the DRO. You must keep on paying your rent, utility bills and other ongoing commitments. Please note that you would be responsible for any debts you incur after the DRO has been approved.

You would be subject to the same restrictions as bankruptcy proceedings and you would be required to provide the official receiver with any information they requested.

At the end of the DRO, all the debts listed in it would be discharged and you would be free from them.

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DRO's are provided by our associated company Baines and Ernst Limited Registered in England and Wales No.03167325. City Wharf New Bailey Street Manchester, M3 5ER. Consumer Credit Licence No. 0408014 Data Protection Registration No. Z8931509 VAT Registration: 628700343.