What is a Debt Relief Order (DRO)?
Debt Relief Orders (DRO) is a formal debt solution designed for people with little or no assets and low income.
If you don’t own your own home & have little spare income and debts that are less than £30,000 a Debt Relief Order (DRO) could be a way to deal with your debts. It is an alternative debt solution to Bankruptcy or an Individual Voluntary Arrangement and available to residents of England, Wales and Northern Ireland.
Benefits and Considerations of a Debt Relief Order (DRO)
Benefits of a Debt Relief Order
-Typically a Debt Relief Order lasts twelve months
-Debt Relief Orders don’t require you to make payments into them
-Creditors are stopped from taking any further action against you
-There is a small fee of £90 for starting a Debt Relief Order that can be paid in instalments
-A Debt Relief Order is relatively simple process to start and can be done through various charity organisations
Considerations of a Debt Relief Order
-Your credit rating will be affected for six years
-Owning your own property or having assets over £2,000 will stop you entering into a Debt Relief Order
-A Debt Relief Order may be cancelled if you do not comply or if your circumstances change during the the 12 month period, for example if you’re able to make payments towards you debt(s)
-Entering into a DRO will be recorded on a public register
-If you can afford more than £75 after your monthly essentials have been budgeted for then you will not qualify