Debt Relief Orders Explained

What Is a Debt Relief Order (DRO)?

A Debt Relief Order (DRO) is a form of debt solution designed for people with low income and few assets. It freezes debt repayments and interest for 12 months.

If your financial situation has not improved at the end of this period, the debts included in the DRO will usually be written off.

DROs are aimed at people with lower levels of debt who cannot afford more formal insolvency procedures such as bankruptcy.

What This Guide Covers

• Who is eligible for a Debt Relief Order
• How to apply for a Debt Relief Order
• Rules and restrictions of a DRO
• Frequently asked questions about DROs

Who Is Eligible for a Debt Relief Order?

From June 2024, the eligibility criteria were updated. You might qualify for a DRO if:

• you owe £50,000 or less
• you own a vehicle worth less than £4,000, which isn’t counted as part of your assets

To be eligible in England and Wales, you must meet these conditions:

• owe less than £30,000 (or £20,000 in Northern Ireland)
• have less than £75 a month spare income
• own less than £2,000 worth of assets*
• not own a vehicle worth more than £2,000 (exceptions apply for adapted disability vehicles)
• have lived, owned property, or worked in England, Wales, or Northern Ireland within the last 3 years
• not have applied for a DRO in the last 6 years
• not be bankrupt, in an IVA, or in another formal insolvency process

*Important: only one vehicle can be excluded as an asset, and only if it is adapted for a disability.

Which Debts Can Be Included in a DRO?

Most unsecured debts can be included, such as:

• household utility arrears
• council tax
• credit cards, loans, or store cards

Some debts cannot be included in a DRO, including:

• court fines and criminal penalties
• child maintenance arrears
• TV licence arrears
• DWP Social Fund loans (e.g. budgeting loans)
• debts linked to fraud, such as fraudulent benefit claims

How to Apply for a Debt Relief Order

Since 6 April 2024, applying for a DRO is free – the £90 application fee has been removed.

The process is as follows:

1. Speak to an authorised debt adviser (you cannot apply on your own).
2. Your adviser submits an application to the Insolvency Service.
3. An official receiver reviews your application, usually within 10 working days.

If approved, you’ll be protected from creditors chasing payment throughout the 12-month DRO period.

See more: Where to Get Free Debt Advice

Rules and Restrictions of a Debt Relief Order

When you enter a DRO, you must follow strict rules called restrictions, which normally last for 12 months. They can be extended if misconduct (like lying on your application) caused your debts.

During a DRO you cannot:

• borrow more than £500 without telling the lender about your DRO
• act as or form a company director without permission from the court
• run a business without disclosing your DRO to those you deal with

You may also be asked to inform your bank or building society that you are on a DRO.

You must continue paying:

• rent and priority household bills
• debts excluded from the DRO (e.g. student loans, court fines)

A DRO can be cancelled if:

• your finances improve significantly
• you fail to cooperate with the official receiver
• you take on new debt without informing creditors about your DRO

Debt Relief Order FAQs

What happens if my circumstances change during a DRO?

You must inform the official receiver. If your income rises or you receive a lump sum, they’ll decide if the DRO can continue.

Can creditors chase me during a DRO?

Creditors included in your DRO cannot demand payment or take legal action. If they continue to pressure you, contact the Insolvency Service DRO Unit.

Will my DRO be listed publicly?

Yes. In England and Wales, your details will be published on the Individual Insolvency Register for the duration of the DRO and removed 3 months after it ends.
In Northern Ireland, details are placed on the public DRO Register under similar conditions. Applications can be made to hide addresses in exceptional cases (e.g. risk of domestic violence).

Can a DRO be cancelled?

Yes. The official receiver may revoke your DRO if you:

• failed to give accurate information on your application
• hide or transfer assets
• do not report changes in your financial situation

If a DRO is cancelled, you will become responsible again for repaying all included debts.