All about Debt Relief Orders (DROs)
If you remember only one thing from this page it should be this: if a debt advisor says you qualify for a Debt Relief Order, agree to it! These are brilliant for people in debt. Unfortunately, there is very specific criteria when it comes to qualifying for one. Let's take a look.
What is a Debt Relief Order?
This is an insolvency debt solution available for UK citizens. If you qualify you will not need to make any more payments towards your debts.
The Debt Relief Order lasts for 12 months, if after that time your circumstances haven’t improved, your debts will be written off. Can you see why if you qualify you need to apply!
Is a Debt Relief Order right for me?
If you have debt you are struggling to manage and you fall into the qualifying criteria then a Debt Relief Order is likely for you. The only thing you have to consider is whether your circumstances are set to change in the next twelve months.
If things are going to change, and this will take you out of the qualifying criteria, there is little point starting a DRO. You might as well start a debt solution that you are going to be able to see through to the end.
As in all cases, an experienced debt advisor will be able to help you.
Qualifying criteria for a DRO?
- You cannot be a homeowner
- Your debt level must be under £20,000
- You cannot have any assets over £1,000
- Your disposable income must be under £50
- Your circumstances are unlikely to change in the next 12 months
How do you apply?
Once it’s been established you qualify for a DRO, the Debt Management company you are dealing with should set everything up for you. They’ll send you a letter with a barcode on it. This barcode can be taken to the post office where you’ll pay £90 to apply.
This might seem like – and is – a lot of money. We’d urge you to think about it in context though. Once you’ve paid this £90 your payments to your lenders are frozen.
How will a Debt Relied Order impact you?
For the most part a Debt Relief Order should impact you positively. However, there are still things to consider.
- Your credit rating will be impacted for 6 years
- There are certain public sector jobs you will not be able to hold
- You will not be able to obtain credit over £500
Speak to experts you can trust
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