If you’re overwhelmed by debt and struggling to make ends meet, a Debt Relief Order (DRO) could provide the fresh start you need. Designed for individuals with low income, minimal assets, and debts they cannot repay, DROs offer a government-backed solution to alleviate financial burdens.

 

What Is a Debt Relief Order?

 

A Debt Relief Order is a formal insolvency procedure available in England, Wales, and Northern Ireland. It freezes your qualifying debts for 12 months, during which creditors cannot take action against you. If your financial situation doesn’t improve within this period, the debts included in the DRO are written off, providing you with a clean slate.

 

Who Is Eligible for a DRO?

 

To qualify for a DRO, you must meet the following criteria:

  • Debt Threshold: Owe less than £50,000 in unsecured debts.
  • Asset Limit: Own assets valued under £2,000, excluding a vehicle up to £4,000.
  • Income: Have less than £75 in surplus income each month after covering essential living expenses.
  • Residency: Have lived or worked in England, Wales, or Northern Ireland within the last three years.
  • Insolvency History: Has not had a DRO in the past six years and has not been involved in other formal insolvency procedures.

 

How Does the DRO Process Work?

 

  1. Consultation: You must apply through an approved intermediary, such as a qualified debt adviser, who will assess your eligibility and assist with the application.
  2. Application Submission: The intermediary submits your application to the Insolvency Service.
  3. Moratorium Period: If approved, a 12-month moratorium begins, during which you make no payments toward the debts included in the DRO, and creditors cannot take enforcement action. 
  4. Debt Discharge: At the end of the 12 months, if your financial situation hasn’t improved, the debts are discharged, and you’re no longer liable for them.

 

Recent Changes to DROs

 

As of April 6, 2024, the £90 application fee for DROs in England and Wales has been abolished, making it more accessible for individuals in financial hardship. 

 

Is a DRO Right for You?

A DRO can be a powerful tool for those who meet the eligibility criteria and need relief from unmanageable debt. However, it’s essential to consider all options and seek professional advice to determine the best course of action for your specific circumstances.

 

At Step Away Debt, we specialize in providing tailored debt solutions, including assistance with DRO applications. Our experienced advisers are here to guide you through every step, ensuring you make informed decisions toward a debt-free future. Contact us today for a free consultation and take the first step toward financial freedom.

 

Conclusion 

 

A Debt Relief Order can be a transformative solution for those facing severe financial hardship with limited income and assets. It offers a legal route to write off unmanageable debts, peace of mind, and a genuine chance to reset your financial future. If you’re feeling overwhelmed and unsure where to turn, remember—you’re not alone.

At Step Away Debt, our friendly advisers are here to help you understand your options and take confident steps toward becoming debt-free. Reach out today and let us help you find the relief you deserve.