Options for dealing with your debts
Debt Relief Orders
Debt Relief Orders (DROs) are one way to deal with your debts if you:
- owe less than £50,000
- do not have much spare income - usually less than £75 per month
- do not own your home
If you have a DRO, you:
- stop making payments towards your debts (including interest) for 12 months
- need to follow certain rules (‘restrictions’) during that time
- will not need to pay the debts or follow restrictions after 12 months
A DRO can be cancelled if your financial circumstances change. It can be extended if you do not follow the restrictions.
You will still have to pay:
- your rent and bills
- certain debts not included in the DRO, such as student loans or court fines
Restrictions
There are restrictions on what you can do while you have a DRO.
You cannot:
- borrow more than £500 without telling the lender about your DRO
- act as the director of a company
- create, manage or promote a company without the court’s permission
- manage a business without telling those you do business with about your DRO
- open a bank account without telling the bank or building society about your DRO
You may be prosecuted if you break any of these restrictions while you have a DRO.
Eligibility
You’re generally eligible if you meet all of these criteria:
- you owe less than £50,000
- you’ve less than £75 a month spare income
- you’ve less than £2,000 worth of assets
- you do not own a vehicle worth £4,000 or more
- you’ve lived or worked in England and Wales within the last 3 years
- you have not applied for a DRO within the last 6 years
Get a Debt Relief Order
Contact an approved debt adviser to apply for a DRO. You cannot apply for a DRO on your own.
You do not need to pay for a DRO.
MoneyHelper has information about where to get free debt advice.
Records
Your DRO will:
- be added to the Individual Insolvency Register - it’s removed 3 months after the DRO ends
- stay on your credit record for 6 years - this is the same as other debt relief options