Debt Relief Orders

To be eligible for a Debt Relief Order you must meet all of the following criteria at the date of application:

• Total qualifying debt: £30,000 or less (as of June 2024 — previously £20,000)
• Surplus income: £75 or less per month after essential household expenditure
• Total assets: £2,000 or less (excluding a car worth up to £4,000 if reasonably needed for work or essential personal use)
• Domicile: You must be domiciled in England or Wales, or have been ordinarily resident or carrying on business there in the three years before application
• No recent insolvency: You must not have had a DRO, IVA, bankruptcy, or debt management order in the previous six years
• Not a homeowner: You must not be a beneficial owner of a dwelling house (though this does not prevent you from renting)

Not all debts qualify. Excluded debts include student loans, child maintenance, criminal fines, confiscation orders, and debts incurred through fraud. These will survive the DRO and continue to be owed.

You cannot apply directly to the Insolvency Service for a DRO. You must apply through an approved intermediary — typically a debt adviser at a free debt advice charity. The main organisations with approved intermediaries include Citizens Advice, StepChange, and National Debtline.

The process works as follows:

1. Debt advice session: A regulated debt adviser assesses your situation and determines whether a DRO is appropriate.
2. Application preparation: The intermediary helps you complete the application, which lists all your debts, income, assets, and expenditure.
3. Fee payment: You pay the £90 application fee — this can be paid in instalments to the adviser but must be paid in full before the application is submitted. It cannot be waived.
4. Submission to Insolvency Service: The intermediary submits the application electronically.
5. Decision: The Official Receiver (a civil servant at the Insolvency Service) makes the DRO within 10 working days if satisfied with the application.

Once made, the DRO is entered on the Insolvency Service's Individual Insolvency Register, which is publicly searchable. Your creditors are notified.

From the date your DRO is made, you enter a 12-month moratorium period. During this time:

• Creditors of qualifying debts cannot pursue you for payment, apply to court, or send bailiffs
• Interest and charges on qualifying debts are frozen
• You cannot be made bankrupt in relation to the qualifying debts

During the moratorium you must:

• Co-operate with the Official Receiver if they contact you
• Notify the Official Receiver within 14 days if your financial circumstances improve (for example, if you receive an inheritance, a pay rise takes you above the £75 surplus threshold, or your assets increase above the limit)
• Comply with the DRO restrictions — you cannot obtain credit of £500 or more without disclosing the DRO, act as a company director, or manage a business without court permission

If you provide false information, fail to notify improvements in your circumstances, or breach restrictions, the Official Receiver can revoke the DRO and you may face prosecution.

After 12 months (assuming there has been no revocation or extension), your qualifying debts are automatically discharged — written off completely. You receive no formal letter from the Insolvency Service confirming discharge; it happens automatically and is noted on the public register.

Following discharge:

• The DRO and associated debts remain on your credit file for six years from the date the DRO was made
• You may find it difficult to obtain credit, a mortgage, or certain financial products during this period
• Some professional and regulated roles may be affected — check with your professional body if relevant
• Renting privately may be harder as some landlords run credit checks
• The DRO will appear on the Individual Insolvency Register for three months after discharge, then be removed

Despite these restrictions, many people find that a DRO provides a genuine fresh start. With debts discharged, you can begin rebuilding your credit file over time. Free money management support is available from charities such as the Money Advice Service and Citizens Advice.