Debt Relief Order DRO – Pros and Cons – FAQs – Alternatives to DRO

If you have unsecured debts of less than £15,000 and little or no disposable income then a Debt Relief Order offers a solution which is an alternative to, and less costly than, bankruptcy.

Debt Relief Orders are administered through the Insolvency Service and typically last for 12 months after which time the unsecured debts listed in the order will be written off. So if you have serious debt problems, a Debt Relief Order offers a solution which means you could be debt-free in one year.

There are conditions which need to be met in order to apply for a Debt Relief Order. You cannot apply if you’re a homeowner, have assets worth more than £300 or a vehicle worth more than £1,000. Having paid your living expenses, you also need to have a disposable income of £50 or less. Our friendly team of advisors can help you work out your budget to see if you meet the Debt Relief Order criteria.

A Debt Relief order is an alternative to bankruptcy and costs less to process however, like bankruptcy, there are consequences for the future which need to be considered as they might affect your employment and credit.

Our friendly advisors can give you more information about whether a Debt Management Plan is right for you. Call today on 0800 690 6853.

DEBT RELIEF ORDER PROs and CONs

PROs

• Lasts for 12 months after which time the debt will be written off
• Your creditors cannot take further action against you without the permission of court
• It is an alternative to bankruptcy which costs less to process

CONs

• If you’re a homeowner you cannot apply for a Debt Relief Order
• Certain debts - like student loans and fines - cannot be included
• Your credit rating will be affected for 6 years after the DRO, which will also remain on public record for 15 months.
• A Debt Relief Order must be processed by an Approved Intermediary
• If your circumstances change within the 12-month DRO period you may be liable to repay your debts in full

DEBT RELIEF ORDER FAQS

Am I eligible for a Debt Relief Order?

I’m thousands in debt. Will a Debt Relief Order still be right for me?

Can all my different debts be included?

When will I be debt-free?

Can I arrange a Debt Relief Order myself?

Will a Debt Relief Order affect my credit?

To find out more about whether a Debt Relief Order is the right debt solution for you, talk to one of our friendly advisors today on 0800 690 6853.