Can I get a Debt Relief Order?

Posted by admin on Feb 4, 2012 in Credit Card Application | 8 comments

Debt Relief Orders were introduced in England and Wales in 2009, to help people who are really struggling with unsecured debts, are on a low income and have very few valuable assets.

A DRO gives 12 months of respite from any action by their lenders, during which time they can’t pursue any debts – and after which those debts will be written off, unless their situation has really improved.

Can I get a Debt Relief Order?

If you meet the following conditions, then you may be able to get a Debt Relief Order:

• DROs can only help people who can’t afford their debts anymore.
• The maximum amount of debt a DRO can help with is £15,000. If you owe more than this, you can’t get a DRO.
• A DRO is only an option for the people who need it most – who only have assets worth £300 or less (although they may own a car up to the value of £1,000).
• You could qualify for a DRO if after tax, national insurance and normal household expenses, you’re only left with £50 or less every month.
• DROs are only available if you live in England, Wales, or (since 2011) Northern Ireland. If you’ve lived or worked in any of these places during the last three years, you may qualify for a DRO.
• You can only have one DRO every six years.
• You can’t apply for a DRO if you’re already going through some other form of insolvency.

If you do meet the conditions above and you want to apply for a Debt Relief Order, contact Debt Advice Now.

If you did qualify for a DRO and you found yourself in a better financial situation 12 months later, you could begin making repayments again. If not, the unsecured debts would be written off.

A DRO is a good alternative to bankruptcy for people on low incomes with few valuable assets, who really can’t repay their unsecured debts anymore. However, your credit rating would be damaged, as it would have been if you had gone bankrupt. The DRO only lasts one year, but your credit rating would be affected for six years.