Debt Relief Order vs Bankruptcy
Both a Debt Relief Order and bankruptcy can give you a fresh start if you cannot pay your debts, but they suit different circumstances. This comparison sets out the key differences so you can understand which option may apply to you.
| Feature | Debt Relief Order | Bankruptcy |
|---|---|---|
| Maximum debt | £30,000 | Unlimited |
| Cost | £90 | £680 |
| Duration | 12 months | 12 months |
| Asset limit | Assets must not exceed £2,000 | Court decides what assets are realised |
| Income surplus allowed | No more than £75 per month surplus income | Varies — income payments agreement may apply |
| Public register | ||
| Credit record impact | Remains on credit file for 6 years | Remains on credit file for 6 years |
A Debt Relief Order is only available through an approved intermediary — you cannot apply directly. Both options have serious long-term consequences. Always get free debt advice from Citizens Advice or StepChange before proceeding.
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Debt Relief Orders
A Debt Relief Order (DRO) is a formal insolvency solution for people with relatively low levels of debt, minimal assets, and very low surplus income. When a DRO is granted, you enter a 12-month moratorium during which creditors cannot take action against you and interest is frozen. At the end of the 12 months, your qualifying debts are written off completely. A DRO can be a powerful fresh start — but it comes with conditions and restrictions.
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Breathing Space (Debt Respite Scheme)
Breathing Space, formally known as the Debt Respite Scheme, gives people in problem debt a legal pause from most creditor action for 60 days. During this period, interest and charges on qualifying debts are frozen, and creditors cannot chase you, take you to court, or send bailiffs. The scheme was introduced in May 2021 and is available in England and Wales.
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Priority vs Non-Priority Debts
When you are struggling with multiple debts, the most important decision is which to pay first. Not all debts are equal — some carry far more serious consequences than others if left unpaid. Understanding the difference between priority and non-priority debts is the foundation of any debt management strategy and can protect you from losing your home, having your energy cut off, or facing imprisonment.
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