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Debt Relief Orders

A Debt Relief Order (DRO) is a formal debt solution for individuals with low debts and minimal assets. It freezes payments, interest, and charges for 12 months, during which creditors cannot pursue you for payment. If your financial situation remains unchanged after this period, qualifying debts are written off. A DRO stays on your credit file for six years.
Elderly client receiving support

Criteria for a Debt Relief Order

To qualify for a DRO, you must:

  • Have £75 or less spare income per month.
  • Owe less than £50,000.
  • Not be a homeowner.
  • Have less than £2,000 in assets (excluding a car worth up to £4,000).
  • Not have had a DRO in the last six years or be in another insolvency procedure.
  • Have lived or worked in England, Wales, or Northern Ireland in the last three years.

How does a Debt Relief Order work?

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Apply through a DRO adviser

Applications must be made through a professional DRO adviser or approved organisation.

Freeze debts

Payments, interest, and charges are frozen for 12 months, and creditors cannot take legal action against you.

Debt write-off

After 12 months, qualifying debts are written off if your financial situation hasn’t improved.

Benefits

  • Free to apply.
  • A quicker way to become debt-free (12 months).
  • No payments required during the DRO period.
  • Interest and charges are frozen.
  • Retain assets like a car valued under £4,000.
Submitting income and expenditure online
Bankruptcy guidance for clients

Considerations

  • Financial changes during the 12 months can revoke the DRO.
  • Recorded on the Individual Insolvency Register and credit file for six years.
  • Homeowners and those with significant assets are ineligible.
  • Certain debts, like court fines and student loans, are excluded.

Examples of debts that can be included*

Credit & Store Cards

Personal loans

Catalogues

Overdrafts

Buy Now, Pay Later

Payday loans

Examples of debts that may be included*

Utility bill Arrears (gas, electric, water)

HMRC debts (self-assessment)

Benefit overpayments (DWP or local authority)

Council Tax Arrears

Rent arrears

Debts to friends or family

Examples of debts that cannot be included*

Child maintenance arrears

Student loans

Secured loan arrears

Court fines

Mortgage arrears

Car financing arrears (including PCP & HP)

Faqs

A DRO freezes payments, interest, and charges for 12 months. If your financial situation doesn’t improve, qualifying debts are written off.
Those meeting the eligibility criteria, including low income, minimal assets, and residing in England, Wales, or Northern Ireland.
It lasts for 12 months, after which debts are written off if your circumstances haven’t changed.
A DRO stays on your credit file for six years, affecting your ability to borrow.
Excluded debts include court fines, student loans, child maintenance, and tax underpayments.
You must apply through a DRO adviser or approved organisation. Self-applications are not allowed.

How can Debt Free Associates Limited help?

Our knowledgeable team can assess the best option for you and connect you with trusted partners who can administer the arrangement. Contact us today or use our live chat for immediate assistance.
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