Debt Relief Orders are only available in England and Wales.
If you live in Scotland, the equivalent is LILA (Low Income Low Asset) Bankruptcy.
A Debt Relief Order (DRO) is an alternative to bankruptcy for people who are unable to afford any of the other available debt solutions or even to petition for their own bankruptcy. Currently, petitioning for your own bankruptcy costs £495, but with a Debt Relief Order, it will only cost £90.
Criteria you must fulfil for a Debt Relief Order
- Your total unsecured debt must not be more than £15,000
- You must be unable to afford your current repayments and charges
- Any assets you own should total no more than £300 and only non-essential items which can be easily sold are considered
- Your disposable income should total no more than £50 and you should not count your credit repayments when assessing this
- You cannot be involved in any other form of insolvency, for example, in an IVA
- If your circumstances changed during the duration of the Debt Relief Order, you would have to start repaying your creditors
Things you need to know
- A record of your Debt Relief Order will remain on your public record for 15 months and will be on your credit file for 6 years
- You will not be able to obtain credit of £500 or more without informing the provider you are within a Debt Relief Order
- You are not permitted to trade (directly or indirectly) in a name that is different from the name under which you were granted a DRO. You must tell all those with whom you do business, the name under which you were granted a DRO
- You may not be involved with the promotion, day-to-day management or formation of a limited company
- You must seek the court's permission if you wish to act as a Company Director
- You can only obtain a Debt Relief Order every 6 years
If you want more information on Debt Relief Orders, please contact us.