Debt relief orders

This content applies to England only.

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In April 2009, debt relief orders (DRO’s) were created as an alternative to bankruptcy proceedings, to allow relatively straightforward cases to be fast-tracked through the court system. A debt relief order will normally last for 12 months, after which any remaining debts will be written off.

However, a debt relief order is a form of insolvency order and there are many restrictions on your financial activities, similar to those relating to bankruptcy. For example you will not be able to borrow more than £500 without disclosing that you are subject to a debt relief order.

Who can apply for a debt relief order

A debt relief order is less complicated than an application for bankruptcy, and may be suitable if you have few assets, very little income and are not able to repay your debts within a reasonable time. In order to apply for a debt relief order, you will need to have:

unsecured debts of less than £15,000 (not all debts can be included in a DRO – you will need to check with an adviser which ones can be), and
gross assets worth less than £300 (if you are a homeowner the value of your home counts, so homeowners are extremely unlikely to be able to get a DRO), and
a disposable income of no more than £50 per month (after the deduction of normal household expenditure).

You cannot get a DRO if:

you have already had one within the last 6 years
you are already involved in another insolvency procedure such as bankruptcy, or
you are subject to an individual voluntary arrangement (IVA).

Your debt relief order will be monitored by the court through the Official Receiver and you will be expected to repay your creditors if your financial situation changes.

How do you apply for a debt relief order?

Your application for a debt relief order must be completed online, but you will need to apply through an ‘approved intermediary’. Approved intermediaries will mainly be experienced debt advisers who work for organisations such as Citizens Advice or the Consumer Credit Counselling Service. The approved intermediary will check your paperwork, and evidence of your income and debts to make an assessment to see whether you could be eligible for a debt relief order.

You will also need to pay a fee of £90 – this is considerably cheaper than bankruptcy. The application for a DRO will be considered by the Official Receiver who may make an order without a court hearing if the applicant meets the necessary requirements.

Any creditor will be able to object to being included in a debt relief order. This may lead the Official Receiver to:

leave the DRO unchanged
choose to amend it
decide to revoke (cancel) it, or
apply to the court for further guidance on what should be done in your situation.