What is a Debt Relief Order?


A Debt Relief Order (DRO) is a formal insolvency process aimed at people with relatively smaller amounts of debt (less than £20,000) and little to offer their creditors (less than £50 after essential expenditure and living cvosts have been accounted for), that are unable to meet their monthly credit commitments. In addition, to be eligible for a DRO, the sum total of your vehicle assets must not be in excess of £1,000 and your non-vehicle assets must not exceed £1,000.

You are protected from your creditors taking action against you (without permission from the court) during the time that the DRO is in effect (this is called a moratorium), which is typically 12 months. At the conclusion of the DRO, any debts listed in the DRO will be discharged, which means you will no longer be required to make any payments towards them.

The DRO application can only be made by an Approved Intermediary, which is an advisor that has been given permission to complete the online Insolvency Service forms by a Competent Authority.

There is a fee of £90, which must be paid before the Official Receiver will consider your application. This fee can be paid in instalments over a six month period if necessary.

A Debt Relief Order also carries with it a number of restrictions that you need to be aware of:

  • If you wish to obtain credit of £500 or more, you must tell the prospective lender that you are currently in a DRO.
  • You cannot trade using a name that is different to the name under which your DRO was approved, without informing those that you do business with.
  • You are not allowed to form a limited company or act as a company director, without court permission.

You can read more about Debt Relief Orders and whether one is suitable for your situation in our Debt Relief Order section.

Debt Advice Foundation is a registered UK charity offering free, confidential support and advice on any aspect of debt, including Debt Relief Orders. If you need to talk to someone about Debt Relief Orders or would like to discuss the alternatives, please call 0800 043 40 50 to speak to an adviser.