DEBT RELEIF ORDER
Could a DRO give you a fresh start?
A Debt Relief Order (DRO) is a formal debt solution for people who have a low disposable income, limited assets and qualifying debts. If you meet the criteria, payments towards included debts are usually stopped and those debts can be written off after the DRO period successfully ends.
DRO at a glance
£75 or less
Disposable income
You must have £75 or less left each month after household expenses.
£50,000
Maximum qualifying debt
Your total qualifying debts must not exceed £50,000.
£2,000
Maximum qualifying debt
Your vehicle will normally need to be worth £2,000 or less.
£4,000
Asset limit
Your total assets must generally be worth no more than £4,000.
What exactly is a DRO?
A Debt Relief Order (DRO) is a formal insolvency solution designed for people who cannot afford to repay their debts and who meet specific eligibility criteria.
A DRO normally lasts 12 months. During this period, you generally don't make payments towards the debts included in the DRO and creditors included in it cannot pursue you for payment without the court's permission.
If your circumstances haven't changed sufficiently by the end of the DRO period, the qualifying debts included in it are normally written off.
Good to know: There is currently no application fee for a Debt Relief Order
Potential benefits
✅ Qualifying debts may be written off
✅ Creditors must stop collection activity
✅ No monthly payments in many cases
✅ Low-cost insolvency solution
✅ Legal protection from included creditors
✅ Usually completed after 12 months
Considerations
❌ A DRO will affect your credit file for 6 years
❌ Your details will appear on the Individual Insolvency Register
❌ There are strict eligibility criteria
❌ Your circumstances must not significantly improve during the DRO
❌ Some professions may be affected by insolvency solutions
❌ You may not be able to obtain credit over £500 without disclosure
Questions about DROs
How long does a DRO last?
A DRO normally lasts 12 months. This is sometimes called the moratorium period. If your circumstances haven't changed sufficiently during this period, the qualifying debts included in your DRO are normally written off when it ends.
Does a DRO affect my credit rating?
Yes. A DRO will have a significant effect on your credit rating and will normally remain on your credit file for six years from the date it begins.
Will I have to make payments towards my debts?
You don't normally make payments towards debts included in your DRO during the DRO period. You must continue paying ongoing commitments and any debts that aren't included.
Can I have a DRO if I own my home?
Generally, you cannot obtain a DRO if you own your home, including where you own it jointly with somebody else.
Can I keep my car?
You may be able to keep a vehicle provided its value falls within the applicable DRO rules. Certain vehicles may also be disregarded in specific circumstances.
What happens if my circumstances improve?
You must report relevant changes in your circumstances. If your financial position improves enough that you no longer meet the DRO requirements, your DRO could potentially be revoked.
What debts can be included?
Many unsecured debts can qualify, including credit cards, loans, overdrafts, catalogue debts, utility arrears and some benefit or tax debts. However, some debts cannot be written off through a DRO, so each debt needs to be considered individually.
Is a DRO public?
Yes. Details of a DRO are normally recorded on the Individual Insolvency Register during the DRO and for a period afterwards.
How much does a DRO cost?
There is currently no fee to apply for a Debt Relief Order.
DRO Alternatives
We'll help you understand the solutions available & what's right for your situation
Individual Voluntary Arrangement (IVA)
Combine your debts into one affordable monthly payment with legal protection from creditors.
Debt Management Plan
(DMP)
Make one manageable monthly payment while reducing pressure from creditors and regaining
Bankruptcy
(BKY)
A formal debt solution that can help clear unaffordable debts and give you a fresh financial start.
To find out more about managing your money and getting free advice, visit Money Advice Service, independent service set up to help people manage their money.