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A Debt Relief Order (DRO) is a form of insolvency which is designed to help people who have relatively low debt, little surplus income and few valuable assets.
A DRO is similar to bankruptcy, but for people with income and assets of low value enough to be excluded from bankruptcy – so the process is less complex and cheaper.
Advantages
Affordable Costs
The fee (£90) is affordable and can be paid by instalments but must be paid before the application can be made.
Confidence of Good Advice
The approved intermediary ensures that you are given appropriate advice and that you fit the criteria for a DRO.
Creditor Protection
Creditors included in the DRO cannot take further action against you without the Court’s permission.
All Debts Written Off
A DRO last for 12 months, and once completed you are released from all your debts.
Considerations
Not Private
Being subject to a DRO is recorded in the Personal Insolvency Register.
You Can't Already Be Insolvent
You may not be currently bankrupt, subject to bankruptcy restrictions, in an IVA or done a DRO in the last 6 years.
Not for Homeowners
You won’t be able to have a DRO if you own a house, even if it has no equity in it.
Debt Relief Restrictions Order (DRRO)
You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to a DRO.
Employment Implications
Those subject to a DRO may be excluded from certain professions and roles.
Restrictions on Credit
You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to a DRO.
Co-operation Required
Your DRO could be cancelled if you don’t cooperate with the official receiver while the DRO is in force.