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Debt Relief Order – An Option For Paying Off Your Debt

Debt Relief Order

Last Updated May 2024 – Originally Published 13 May 2022


What Is A Debt Relief Order?

A Debt Relief Order or DRO puts a freeze on your debt repayments and interest for 12 months.

If your financial situation has not changed when the DRO is complete then all of the debts included will be written off.

To get a DRO you must have debts less than £30,000, have little spare income and not own your own home.


This article will cover:

Who Is Eligible For A Debt Relief Order?

How To Apply For A Debt Relief Order?

Rules and Restrictions Of A Debt Relief Order

DRO Frequently Asked Questions


Who Is Eligible For A Debt Relief Order?

From June 2024 the eligibility is changing:

  • you might be able to get a DRO if you owe £50,000 or less
  • if you have a vehicle worth less than £4,000, you don’t have to include it in your assets


To be eligible for a Debt Relief Order you must meet these criteria:

  • owe less than £30,000 (£20,000 in Northern Ireland)
  • have less than £75 a month spare income
  • have less than £2,000 worth of assets*
  • do not own a vehicle worth £2,000 or more
  • have lived, had a property, or worked in England or Wales or Northern Ireland within the last 3 years
  • have not applied for a DRO within the last 6 years
  • aren’t going through another formal insolvency procedure, such as bankruptcy or an individual voluntary arrangement (IVA)

* If your vehicle is worth more than £2,000, you don’t have to include it in your assets if it’s been adapted because you have a disability. You can only exclude 1 vehicle from your assets and you can’t exclude it if you only use it for work.


Which Debts Are Included In A Debt Relief Order?

Most debts can be included in a DRO including:

  • household utility bills
  • council tax
  • consumer debt like credit and store cards.

Some debts are excluded from a DRO including:

  • criminal fines
  • child maintenance
  • TV licence arrears
  • DWP Social Fund Loans, such as budgeting loans
  • debts that have been taken out fraudulently, including benefit overpayments that have occurred as a result of fraud


How To Apply For A Debt Relief Order?

From 06 April 2024, you do not need to pay for a DRO – there’s no application fee.

A DRO is provided by the official receiver and costs £90. If you have trouble paying the costs you can pay in instalments, or possibly get help with the fee from a charity.

You apply through an authorised debt adviser who will assist you in completing the paperwork.

Your intermediary will submit your DRO application to the Insolvency Service and they will make a decision on your application within 10 working days.

See more: Where to Get Free Debt Advice

If your application is accepted you will get protection from creditors included in the DRO, but there are also certain restrictions you’ll face.


Rules and Restrictions Of A Debt Relief Order

You must follow rules called ‘restrictions’ if you get a DRO.

The restrictions usually last 12 months, but can be extended if careless or dishonest behaviour caused your debt problem. For example, you lied to get credit.

Throughout the DRO you cannot:

  • borrow more than £500 without telling the lender about your DRO
  • act as the director of a company
  • create, manage or promote a company without the court’s permission
  • manage a business without telling those you do business with about your DRO

If you want to open a bank account, you may also have to tell the bank or building society about your DRO.

While you have a DRO you still have to pay:

  • your rent and bills
  • certain debts, for example student loans, court fines

DROs can be cancelled if:

  • your finances improve
  • you do not co-operate with the official receiver – for example you do not give them the information they ask for

If you get new debt after your DRO is approved you could:

  • get a bankruptcy order
  • be prosecuted if you do not tell new creditors about your DRO


Frequently Asked Questions About DROs


What happens if my circumstances change during a DRO?

If your circumstances improve, you must notify the official receiver who will decide whether your DRO can continue, for example;

  • if your income improves or,
  • if you receive a lump sum of money or any assets


Can my creditors chase me for debts during a DRO?

Your creditors can still contact you to tell you how much you owe, but they can’t demand payments from you or start any court action. If they do you should tell them you’re on a DRO. If any of your creditors persistently call or threaten you with further action, you can contact the DRO unit at the Insolvency Service.


Will a debt relief order be listed on an insolvency register?

If you live in England and Wales, your DRO and details such as your name and address will be listed in the Individual Insolvency Register (IIR). Your details will be listed for the duration of the DRO (12 months) and removed three months after your DRO ends.

If you live in Northern Ireland, your details will be registered on the public DRO Register. The information will be removed from the register three months after the DRO has ended, whether it’s been successful or revoked.

An application can be made to keep your address details off the Individual Insolvency Register or the DRO Register in exceptional circumstances, for example where there’s a risk of domestic violence or other personal harm.


Can a debt relief order be cancelled?

The official receiver can terminate the DRO if they discover you intentionally misled them in your original DRO application.

It’s your responsibility to inform the official receiver of changes in your circumstances. It’s an offence to give away or hide assets from the official receiver, and you must co-operate with the Insolvency Service if they ask you to provide information.

If your DRO is cancelled, you’ll need to start making payments again towards any debts that were included.


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