Debt relief order

What is a debt relief order (DRO)?

A debt relief order is a way in which one’s debts are cleared for a period of 12 months. This means that the concerned individual need not pay the debt until the DRO period gets over. During this period, the creditors cannot force that particular individual to pay off their debts as they are secured with the debt relief order. If you are a business owner and are looking for ways to recover your company from debt, then check out our solutions on business recovery and company closures.)

What is a debt relief order?

Is everyone eligible for a debt relief order (DRO)?

No, only persons who fulfil the following requirements are eligible for a DRO

  • The person’s debt amounts to £20,000.
  • If the person isn’t able to pay of his or her debts, then are considered eligible for a DRO.
  • If the person doesn’t have their own home.
  • If the person has only £50 or less remaining after clearing their usual household expenses.
  • If the individual’s assets are less than £1,000. Assets include the person’s savings and other things that they possess.
  • If the person doesn’t own a luxury car or any vehicle that’s worth more than £1000.
  • If the person isn’t going through bankruptcy.
  • If the person has not received a debt relief order in the recent years, six years to be precise.

The following are the few things that you need to declare before you submit your application

  • If you had given away any belongings of yours
  • If you had sold any of your belongings for a value that’s less than its orginial value.
  • If you had cleared the debt of one of your creditor.

The above mentioned things needs to be declared by the individual, failure to do so could lead to the rejection of your DRO application.

The list of debts that a debt relief order (DRO) covers

The list of debts that a DRO covers

Here are a list of debts that a DRO covers

  • Credit card loans and overdrafts
  • Arrears with respect to telephone bill, house rent, income tax and others
  • Overpayments related to benefits
  • Agreements that are based on the buy now and pay later policy
  • Agreements based on conditional sale

The above mentioned debts are also known as qualifying debts as these are covered by a DRO.

Here a list of debts that are not covered by a DRO

Before you decide on getting a DRO, make sure you consult with your DRO advisor well in advance, in order to check whether your debts are covered or not.

What are the various restrictions that one needs to follow during the debt relief order (DRO) year?

  • If you are planning to borrow £500 or more, then you need to inform your creditor about the Debit Relief Order without fail. Failure to do so could lead to a lot of complications in the future.
  • If you have two businesses and used one business’s name to get the DRO, then you need to make sure that you inform the clients of your other business about the DRO too. Both the business’s clients’ needs to be aware of the DRO irrespective which business name was used to get the DRO.
  • You need to get permission from the court, if you are planning to set up or promote a limited company. Prior permissions from the court on plans of becoming a company director is also required during the DRO year.
  • The Insolvency Service’s Individual Insolvency Register will have your details after three months into your DRO period. The details present on the Insolvency Service’s Individual Insolvency Register could be viewed by anyone and if you wish to keep it guarded, then you can request the court to keep it guarded and public for reasons known to the individual.

How can one get a debt relief order (DRO)?

Here are the following steps that one needs to follow to get a DRO

  • Contact a DRO advisor
  • Prepare the application with the DRO advisor
  • Pay the designated fee
  • The final decision by the receiver

Contact a debt relief order (DRO) advisor

The first and foremost step is to find and contact the DRO advisor. The DRO advisor also known as the approved intermediary is the one who will take you through the DRO process step by step. He or she is a skilled advisor, who has been given the official permission to duly check the forms and also give their valuable advice on DROs. The approved intermediary would also check whether the person is actually eligible for the DRO or not and would guide them in the right path. One can also find a DRO advisor, in any of the organization listed at the Insolvency Service website. These organisations also known as competent authorities are listed on the Insolvency Service website, whose URL is www.bis.gov.uk.

Prepare the application with the debt relief order (DRO) advisor

The DRO advisor will check whether you are eligible for DRO or not and would also suggest you the best plan that would suit your circumstance. The DRO advisor would also inform you about the effect the DRO would have on your credit rating and also on your work. They would clearly inform you on what a DRO is and what are its implications. This will help you take a better decision of either take up the DRO or not.

After getting a clear idea on what a DRO is and whether it would suit your circumstance or not, you can now decide whether to take it up or not.

If you decide to take it up, then you would have to work with your DRO advisor and create a application, which would consist of details of your income, assets and others. In this stage you would have to work along with your DRO advisor, and add up your debts and assets with your income, to find out the total amount.

Assets are valuables that belongs to an individual. This amount is added to one’s income, whereas debts are amount that needs to be subtracted from one’s income.

One needs to make sure that they provide honest information to their DRO advisor, in order to get proper results.

You also need to make sure that you provide true information to your DRO advisor. If not then certain restrictions would be passed against you.

Pay the designated fee to debt relief order (DRO) advisor

After you are done preparing the application with your DRO advisor, you would have to pay the prescribed fee to your DRO advisor. The prescribed fee is £90 and needs to be paid in cash at the post office or at the Payzone outlet. This fee can be paid either in instalments over 6 months or in total. Another fact that has to be remembered is that the fees won’t be returned even after the application is rejected. Thus make sure that you are eligible for a DRO before you pay the fees.

The following are the two URL’s that needs to be remembered during the DRO year.



The final decision by the receiver

After paying your fee to DRO Advisor, the official receiver will then make any of the following decisions

  • Prepare the debt relief order: If the application has been duly filled with proper information, then the official receiver with make a proper debt relief order.
  • The official receiver can also refuse or reject the application, if the individual has provided any untrue information. This is completely up to the official receiver to decide whether to accept or reject the order.
  • The official receiver can also defer the application, if they want more information about the individual to make a concise decision.

The individual thus has to make sure that they provide proper information to their receiver, to get their order correctly. Questions asked by the receiver needs to be duly answered by the individual with utmost honesty to avoid any complications in the future.

What if the debt relief order (DRO) was refused or rejected?

  • The DRO application would be rejected if the individual doesn’t meet all the criteria.
  • If the individual refuses to provide information when asked for.
  • If the information already provided is untrue or false.


To ask for a reconsideration, you need to talk to your DRO advisor, who will put across the request to the receiver. Thus will furnishing the necessary information, make sure you provide honest information which has not been tampered in any way. In spite of that if your application gets rejected, then you are allowed take court action. But before you do that, make sure your consult with your DRO advisor and your receiver well in advance.

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Any questions? Schedule a call with one of our experts.

About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.

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About the author
Blog Author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.


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