Debt Relief Orders
(Not available in Scotland)
Debt relief orders assist people to tackle overwhelming debts without having to pay the significant fees associated with applying for their own bankruptcy.
They’re available in England, Northern Ireland, and Wales. Scotland has different insolvency processes.
Anyone who has debts totalling less than £20,000, assets of less than £1,000, and who is not realistically able to pay more than £50 per month in total towards their debts, may wish to consider whether a Debt Relief Order makes sense for them.
You will be ineligible if you are a homeowner.
In addition to the asset cap mentioned above, you’ll be able to keep a vehicle for which you have a reasonable need provided that it’s worth no more than £1000.
The process for applying for a Debt Relief Order is to approach an “approved intermediary”. We suggest approaching the Money Advice Service who will be able to connect you with an appropriate source of assistance.
Once a Debt Relief Order has been granted the creditors will no longer be able to take any further action to recover the debts. Generally these debts will be discharged after a year and therefore will no longer exist.
The application payment required for a Debt Relief Order is £90, which makes it much more accessible for those facing overwhelming debt than bankruptcy.
Public registers of Debt Relief Orders are kept. Your credit rating is likely to be seriously affected if you enter into a DRO.
If you would like to discuss whether a Debt Relief Order would be a good option for you (and learn about the alternatives) please contact us.