What is a Debt Relief Order (DRO)?
Have no assets, no disposable income and under £50,000 of debt?
- Consolidate your debts into one plan
- Write off all unaffordable debt
- No repayments and debt free in 12 months
- May not be suitable for all, fees apply in solutions we offer and they may affect your credit file.
So what exactly is a Debt Relief Order?
A Debt Relief Order or also known as a DRO is a form of Bankruptcy for people who have less than £50,000 of debts, no assets (car is worth less than £4,000 or £2,000 in Northern Ireland) and can not afford more than £75 per month toward their debts to write off all debts with no repayments in just 12 months.
The similar solution in Scotland is a Minimal Asset Process or also known as a MAP, the debt level must be under £25,000, no assets, the vehicle must be worth under £3,000 and have nothing left over at the end of the month after expenses.
A this is a form of insolvency this will go on your credit file for up to 6 years under a public notice.
Benefits of using a Debt Relief Order (DRO)?
- Debts are all written off
- No monthly repayments
- You can let your creditors know you have this in place to stop creditor contact
- Debt free in just 12 months
- You can keep your vehicle if not on finance and under the threshold
Risks of using a Debt Relief Order (DRO)?
- This could affect your job or future employment
- This could affect future or current tenancy agreements
- You may lose all access to credit
- You may lose the right to pay for things monthly
- It is kept on a public register for 15 months
- It stays on your credit file for six years after it starts. This could make it harder to get credit in the future
- It could be cancelled if your finances get better during the ‘moratorium period’. This is for 12 months after your DRO is approved. The people you owe may then ask you to pay them back and add interest and charges to what you owe
- It could be cancelled if you break the rules of your DRO
