Debt Relief Order (DRO)

Debt relief orders - what you need to know

This advice applies to England

A debt relief order (DRO) is one way to deal with your debts if you:

owe £30,000 or less
don’t own your own home
don’t have other assets or things of value
don’t have much spare income

You don't have to make payments towards most types of debt included in your DRO and your creditors can’t force you to pay off the debts. A DRO usually lasts a year unless your situation improves. When the DRO ends, most of your debts will be written off.

You’ll need to speak to a special DRO adviser who will help you fill in an application to the official receiver. The adviser can’t charge you for their time but there's a £90 fee to make a DRO application.

Check if you can get a DRO

You should be able to get a DRO if all of the following apply:

you're unable to pay your debts
your qualifying debts are not more than £30,000
you’ve got no more than £75 left over each month after you’ve paid your usual household expenses
you don’t own your home
other savings or things of value you own, called assets, are worth no more than £2,000 (some assets are ignored when working out the value, for example, basic household items and tools you need to do your job)
it's been at least 6 years since your last DRO was made, unless it was revoked - check why a DRO might be revoked
you aren’t going through another formal insolvency procedure, such as bankruptcy or an individual voluntary arrangement (IVA)
you've lived, had a property, or worked in England or Wales in the last three years.

If you have a vehicle worth less than £2,000, you don’t have to include it in your assets. 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.

Find out more information about how income, debts and belongings are assessed for a debt relief order.

Recent activity

You must tell your DRO adviser if in the last 2 years you’ve:

given away assets
sold assets for less than their value, for example if you sold a car worth £3,000 to a friend for £200
prioritised paying back one creditor over others, for example if you paid off a debt you owed to a relative and didn't pay your other creditors

Your DRO application might be refused if any of these apply to you. They'll look at the facts of your case before making a final decision.

Debts covered by a DRO

Debts that can go into a DRO are called ’qualifying debts'. During the DRO period creditors can’t ask you for payments - if they do, you don't have to pay them. They include:

credit cards, overdrafts and loans
arrears with rent, utility bills, telephone bills, council tax and income tax
benefits overpayments
hire purchase or conditional sale agreements
buy now - pay later agreements
bills for services like vets or solicitors
debts you owe to friends and family
business debts

If you obtained any of these by fraud, you will still have to pay them when the DRO has ended.

If you're behind on your rent, your landlord can still take action to evict you, even if the rent arrears are included in your DRO. This means you may have to continue paying these after a DRO is made.

Debts not covered by a DRO

Not all debts are covered by a DRO. You'll still need to pay:

magistrates court fines and confiscation orders relating to criminal activity
child support and maintenance
student loans
social fund loans
compensation for death and injury

If you have any of these debts they don't count towards the £30,000 limit.

If you’re unsure whether a debt would be covered by a DRO, check with your DRO adviser. If they aren’t you’ll still need to pay them if you get a DRO.

If you forget to include any debts in your DRO you can’t add them after. If any missed debts would have taken you over the £30,000 limit then your DRO might be cancelled. It’s important that you tell the DRO adviser about all of your debts.

Check if a DRO is right for you

A DRO can provide a way out of debt. However, it's important to know the impact a DRO will have on all areas of your life before you apply. For example:

if any of your debts are for goods bought on hire purchase, you might need to give the goods back
your DRO will stay on your credit record for six years - this might make it difficult for you to get credit or find a new home in the future
if you have a tenancy agreement it could be affected, your DRO adviser can check this
your bank might close your account and you’ll need to open a new one
if you hold a power of attorney over someone else's financial affairs or someone else has one for you, this will end
it might affect applications you make for British citizenship - if you are unsure then you should get advice from an immigration specialist

You’ll also have to follow certain rules, called 'restrictions', during the DRO period. This means:

you can't borrow £500 or more without telling the creditor about the DRO
you can’t get involved in promoting, managing or setting up a limited company, or be a company director, without getting permission from the court
if you have a business under a different name from the one under which you got the DRO, you’ll have to tell everyone you do business with the name you used when you got the DRO
while the DRO is in force, and for three months afterwards, your details will appear on the Insolvency Service’s Individual Insolvency Register, which can be viewed by anyone

If having your address on the register could lead to violence against you or a member of your family, you can ask the court to order that your address doesn't appear on the register. You’ll need to apply for a court order before you make your DRO application - your DRO adviser can help you with this.

If you’re not sure a DRO is the best option, you can find out what other help you can get with debts.

How to get a debt relief order

This advice applies to England

If you've decided you want to apply for a debt relief order (DRO) you'll need to find a DRO adviser to make your application to the Insolvency Service who deal with all DROs.

Step 1: find a DRO adviser

You can only apply for a DRO through a specialist DRO adviser, also called an 'approved intermediary'. This is usually a skilled debt adviser who has been given permission to complete the forms and give advice on DROs. They will check that you're eligible to apply and that a DRO is right for you.

You can find a DRO adviser at most local Citizens Advice.

Find out how to talk to an adviser.

You can also find a DRO adviser through other approved organisations, known as 'competent authorities'. Check which organisations are approved on GOV.UK.

Step 2: work with the DRO adviser to make your application

Your DRO adviser will help you work out whether you're eligible to apply for a DRO. They'll also look at whether it's right for you - for example, how it might affect your credit rating, lifestyle and work.

If you decide to go ahead, you'll need to work with your DRO adviser to fill in your application. This will include working out your income and outgoings, and adding up all your debts and assets. Your assets are any savings you have or things of value you own.

It's important to be honest and give your DRO adviser all the information you have. If you apply but you're not eligible, you won't get your application fee back.

The application is sent to an official receiver at the Insolvency Service. It’s their job to make a decision about the application and deal with your DRO if it goes ahead. If the official receiver finds out you've been dishonest in your application, the restrictions under a DRO could be made to last up to 15 years. In serious cases of dishonesty you could be taken to court.

Step 3: pay the fee

You have to pay a fee of £90 to apply for a DRO. You must pay this in cash at a Post Office or Payzone outlet. You can pay it in one go or by instalments. You won't get your money back if your application is turned down, so it's important to make sure you're eligible to apply for a DRO before you pay the fee.

You can find your nearest Post Office on the Post Office website.

You can find your nearest Payzone outlet on the Payzone website.

There are some charities and trusts that might be able to help with paying the DRO fee - your DRO adviser can find out more information about this.

Step 4: the official receiver makes a decision

When you've paid your fee and your application is received, the official receiver will make one of the following decisions:

make the debt relief order if you're eligible and your application has been filled in correctly
defer the order if they need to find out more information to make a decision
refuse the order if you're not eligible or you've given false information

After you've applied for a DRO, you must co-operate with the official receiver. This means answering their questions and providing any further information they might ask for. It’s important that you let the official receiver know if your income goes up or you receive a lump sum, for example a tax refund or backdated benefit award.

If your application is turned down, you'll be given written reasons why it's been refused. You might be able to challenge the decision.