What is a Debt Relief Order?

A Debt Relief Order (DRO) is a personal debt solution designed to help if you have debts that you would otherwise have little hope of ever repaying. Once the Order is in place all of your debts are taken away from you and your creditors can no longer legally pursue you for repayment.

The DRO solution is often compared to Bankruptcy. This is because like bankruptcy a DRO lasts for 12 months after which time the debt that you owe is written off in full. In addition you will be able to keep all your reasonable belongings such as your clothes, furniture and electrical goods including kitchen appliances and your computer or laptop. You will also be able to keep your car as long as it is worth less than £1000.

However the two solutions are different in the sense that there are strict financial criteria that you must meet in order to be eligible to start a DRO which do not apply in bankruptcy. In particular your debt must be less than £20,000 and your disposable income must be less than £50 a month.

The other major difference between a DRO and bankruptcy is the Court does not have to be involved in the implementation of a DRO. The solution is run entirely by The Insolvency Service in partnership with approved debt advisers and the Official Receiver. This means that the cost to start a DRO is very much less than bankruptcy.

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