Debt Relief Orders

• You have less than £50 a month spare income to pay your creditors.
• Your total debts are under £15,000.
• You do not own your home.
• You have assets worth less than £300 in total.

• You own a vehicle worth more than £1,000.
• You own things of value or have savings of over £300.

National Debt Advice uses advisors who will advise you further and help you apply for a DRO; the Debt Management company will then apply for the order on your behalf.

Only certain types of debt can be included in a Debt Relief Order:

• Benefit overpayments, unless the benefit was obtained by fraud.
• Buy now - pay later agreements.
• Credit cards, overdrafts, loans.
• Rent, utilities, telephone, council tax.
• Hire purchase or conditional sale agreements.

Certain types of debt cannot be included in a Debt Relief Order. You must pay these separately. People you owe these debts to can still take action against you, even if you have a Debt Relief Order.

These debts include:

• Student loans
• Social fund loans
• Court fines and confiscation orders. (These are fines relating to criminal activity)
• Child support and maintenance

If you have a hire purchase or conditional agreement you will have to return the goods bought with these loans as you will not be able to carry on paying them once you have a DRO. Unless there is someone else that can take on the payments for you.

When you work out how much disposable income you've got, you must count all the money you've got coming into your household. This includes:

• Welfare benefits, such as Jobseeker's Allowance and Employment and Support Allowance.
• Any rental income.
• Your pension.
• Your salary or wages.
• Contributions from other household members.

You will be able to deduct a reasonable amount for your everyday needs. If the figure left over each month is less than £50 then you may be able to apply for a DRO if you meet the other conditions.

There are some assets and items that you do not have to take into account. These include:

• Household equipment such as bedding, clothing and furniture.
• Tools, books and other items of equipment you use in your job or business.
• A car which has been specially adapted because you have a physical disability and which you need to carry out your everyday activities.
• A motor vehicle worth less than £1,000.

You can get a debt relief order if:

• You are not currently bankrupt.
• You do not have an Individual Voluntary Arrangement (IVA) or are applying for an IVA.
• Your creditors have not applied to make you bankrupt but the hearing hasn't yet taken place. But you might still be able to apply for a debt relief order if your creditors agree.
• You have not been given a Bankruptcy Restrictions Order or Undertaking.
• You have not petitioned for bankruptcy but your petition has not yet been dealt with.
• You have not had a DRO in the last 6 years.
• You have not been given a Debt Relief Restriction Order or Undertaking.

DRO’s are administered by the Official Receiver through the Insolvency Service. We use skilled debt advisers who complete the forms and give advice on DRO’s. Once the application is received, the Official Receiver can make the order as long as you meet all the conditions. It is an offence to give false or misleading information in your application. Once your DRO has been approved you should not pay any of the creditors listed on the order. Your creditors will be told about the DRO and you will be protected from them taking any action. Your debt relief order will be shown on the Individual Insolvency Register. The register is available to the public. Your name and address will be on the register for only 15 months.

• Hiding, destroying or faking any books or documents up to one year before you apply for a debt relief order and during the DRO period.
• Withholding information from Official Receiver of any change in your circumstances that may affect your application, from making the application to the order being granted.
• Giving away or selling assets of value for less than they're worth to help you qualify for getting a DRO.
• Apply for credit over £500 without telling the lender you have a DRO.
• Continue running a business in a different name from the one under which you were given a debt relief order, without telling those that you do business with the name under which you were given a DRO.
• Being involved with promoting, managing, or setting up a limited company, without permission from court.
• Acting as a company director, without getting permission from court.

If you are found guilty of doing any of these things, you will be committing an offence. This could lead to the Official Receiver refusing to grant you an order and in more serious cases you may even be prosecuted.

If you have already been granted a DRO, the Official Receiver might apply for a Debt Relief Restriction Order, or your DRO might be taken away. You will not be found guilty of an offence if you can show that you didn't intend to defraud anyone or hide information.

You will not be required to make any payments to your creditors during your DRO and your creditors won't be able to take any action against you. A DRO usually lasts 1 year.

You will need to continue to pay your normal household bills like rent, council tax, gas, electricity and water charges. If there are any debts that you have not included in the DRO then you will need to pay them off also.

Once your DRO has started you can't add new debts to it. If, however, you have forgotten about or acquired more debts during your DRO you will have to tell the Official Receiver.

If your circumstances change once you have a DRO or if you forgot to include information in the order, you must inform your personal advisor. These changes may include:

• Anything that you remember is incorrect or has been missed out from the information you've given.
• Any increase in your income/salary.
• Any additional money or valuables that you acquire, e.g. money left in a will.

If the Official Receiver is not informed of a change in any circumstances like these, you may be committing an offence. This could lead to the DRO being taken away from you and mean you will have to make alternative arrangements to pay your creditors.

If you have been overpaid any benefits from the Department for Work and Pensions (DWP) then this should be included in your DRO, unless the over-payment was the result of fraud.

A DRO will appear on your credit file for six years and this may affect your ability to get credit in the future.

You may find it difficult to open a bank account once you have a DRO, however you will still be able to open certain prepaid accounts.

If you are believed to have provided wrong information or been dishonest in your application, your Official Receiver can apply for a Debt Relief Restriction Order.

If you are given a Debt Relief Restriction Order, there will be restrictions on the things you can do which can last from 2 to 15 years. However, the DRO period will still end after twelve months and you won't have to pay off any of the debts that are included in the order.

You will no longer have to pay the debts that are listed on your order, as they will be written off and you will have to pay any debts not included in the DRO which are still unpaid. You can apply for a DRO once every six years only.

National Debt Advice uses trained advisors to give advice on DRO’s and recommend the most appropriate action for your needs – whether that is a DRO or another solution. For more free advice on DRO’s or any other debt related issues, please take a few seconds to fill out the simple enquiry form on this page.