Debt Relief Order Changes: The £90 Fee Removal and £50,000 Threshold

A Debt Relief Order (DRO) is a formal insolvency procedure introduced by the Tribunals, Courts and Enforcement Act 2007 and brought into force in April 2009. It is administered by the Insolvency Service through the Official Receiver. It is designed for people who cannot afford bankruptcy but have unmanageable debts.

During the 12-month DRO period:

• Creditors of "qualifying debts" cannot pursue you for the debt.
• Bailiffs cannot enforce qualifying debts.
• Charging orders, statutory demands, and court action on qualifying debts are paused.
• At the end of the 12 months, qualifying debts are written off and you are discharged.

Some debts are NOT covered by a DRO ("excluded debts") and continue throughout: court fines, student loan, child maintenance, social fund loans, criminal damages, secured debts (mortgages, hire purchase), debts secured by personal guarantee, and most TV licence fines.

You can apply for a DRO if:

• Total debts are £50,000 or less (the threshold was £30,000 until 28 June 2024).
• Surplus monthly income after essential expenditure is £75 or less.
• Total assets are £2,000 or less, with a separate £4,000 motor vehicle exemption (so you can have a car worth up to £4,000 in addition to other assets).
• You live, are habitually resident, or have a place of business in England, Wales, or Northern Ireland.
• You have not had a previous DRO in the last 6 years.
• You are not subject to an existing bankruptcy or IVA.
• You are not subject to a court restriction order (e.g. a Bankruptcy Restrictions Order).

"Essential expenditure" is calculated to a standard schedule including rent or mortgage, council tax, utilities, food, transport, child costs, and reasonable other costs. The Approved Intermediary helps you complete the calculation.

Three changes in 2024 made DROs significantly more accessible:

• Fee removed (6 April 2024). The £90 application fee was abolished. DROs are now free.
• Debt threshold raised (28 June 2024). From £30,000 to £50,000.
• Vehicle exemption increased (28 June 2024). From £2,000 to £4,000 — making it easier to keep a working car.

The aim of these changes was to expand DROs to households whose debts had grown beyond the £30,000 cap during the cost-of-living crisis. The Insolvency Service estimates the changes have made an additional 30,000-50,000 households per year eligible.

The £75 surplus income limit and £2,000 (non-vehicle) asset limit have not changed. These remain the binding constraints for some applicants. If your surplus income is above £75, a DRO is not available — but you may qualify for an IVA or a Debt Management Plan.

You cannot apply directly. You must apply through an Approved Intermediary — a debt adviser approved by the Insolvency Service to handle DRO applications. Free Approved Intermediaries include:

• StepChange Debt Charity (0800 138 1111).
• Citizens Advice (find local office).
• Christians Against Poverty (0800 328 0006).
• National Debtline (0808 808 4000).
• Some local council debt advice teams.

The process:

1. Free initial assessment — the adviser checks if a DRO is the right solution for you.
2. Full income and expenditure assessment.
3. Complete the application with the adviser — including listing all debts and creditors.
4. Adviser submits to the Insolvency Service.
5. The Insolvency Service Official Receiver makes the DRO (usually within 4-8 weeks).
6. DRO is added to the Individual Insolvency Register.
7. Creditors are notified and must cease enforcement.

During the 12 months:

• Cannot get credit over £500 without disclosing the DRO.
• Cannot be a company director.
• Some licensed roles (financial services, certain professions) require disclosure and may be refused or revoked.
• Your DRO is on the public Individual Insolvency Register (online, searchable).
• Your bank account may be frozen briefly — open a "basic bank account" before the DRO to avoid this.

After the 12 months:

• You are discharged from the qualifying debts. You no longer owe them.
• Your name is removed from the Insolvency Register (most cases).
• The DRO entry remains on your credit file for 6 years from the DRO date.
• You can apply for credit again — but the DRO on your file will affect approvals.
• You cannot apply for another DRO for 6 years.

The benefits often outweigh the costs for people with serious debt problems and no realistic way to repay.