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Debt Relief Order (DRO)

A DRO is a solution that will write off a person's debts if they have a relatively low level of debt. It's intended for those who have little disposable income, no assets to help repay their debt and who can't afford bankruptcy.

What is a DRO?

A DRO freezes your debt repayments and interest for twelve months and if your financial situation has not materially improved at the end of this period, then all the debts included in the order will be written off. A DRO is a more affordable solution than bankruptcy but applicants need to meet certain criteria in order to be eligible to apply.

Is a DRO right for me?

A DRO may be suitable for you if you have a relatively low level of debt which is equal to or less than £50,000 in England and Wales, minimal assets and little to no disposable income. A DRO may impact your personal, financial and professional life so you should carefully consider this option before deciding to apply. DROs are available for residents of England, Wales and Northern Ireland. For Scottish residents, a minimal assets process bankruptcy is a similar solution.

Is a DRO legally binding?

A DRO is a legally binding arrangement. If you take out a DRO, your creditors will be prevented from taking further action against you unless they receive permission from the court.

How much of my debt will a DRO write off?

On successful completion of the order (usually a period of twelve months) all debts covered by the DRO that you cannot afford to pay will be written off.

DRO Pros

You won't pay anything towards your debts for 12 months and after that, if your financial situation hasn't changed, all your debts covered by your DRO will be written off.

An order will normally only last for a period of 12 months.

A DRO binds your creditors to the agreement and prevents them from taking further action against you.

None of the creditors listed in the DRO application can take any action against you without the court’s permission.

DRO Cons

Your DRO will be registered against your credit file for a minimum of 6 years and will affect your ability to obtain further credit.

Your DRO will be entered onto a public register.

Your DRO could be revoked if you do not co-operate with the Official Receiver or if your circumstances materially improve during the 12 month protection period.

You can’t act as director of a company of be involved in its management unless the court agrees.

A DRO could affect your employment of future employment if you work in a licensed role.

You will be committing an offence if you secure credit of £500 or more without disclosing that you are subject to a DRO.