manage your debt with a debt relief order

Once you’ve provided us with all the necessary information and paid the £90 fee to the Insolvency Service (which will be waived from April 6, 2024), we’ll proceed to submit your Debt Relief Order (DRO) application. The Insolvency Service typically makes a decision within ten working days, equivalent to two weeks.

While it’s possible for a debt relief order application to be refused, we only submit one if we are confident it meets the necessary criteria for acceptance.

If your DRO application is declined, the Insolvency Service will send you a letter outlining the reasons. The main reasons for refusal typically include:

• Not meeting the eligibility criteria.
• Suspected lack of honesty in your application.
• Failure to provide requested additional information.

There’s no set income limit for a debt relief order (DRO). What matters most is the amount of money you have remaining each month after covering all your essential household expenses. If you have more than £75 leftover per month, you won’t be eligible for a DRO.

A debt relief order lasts for 12 months. This 12-month period is known as the ‘moratorium’. During that time, you won’t make any payments towards the debts included in your DRO and your creditors can’t chase you to pay.

If your situation hasn’t improved during the 12 months, those debts are written off, meaning you don’t have to pay them back.

For most people, getting a debt relief order (DRO) won’t affect their job. However, if you work in finance or law, your employment contract might not allow you to keep your job if you become insolvent, and a DRO counts as insolvency. Some public service jobs, like in the army or police, could also be affected, although this is less common these days.

It’s a good idea to check your work contract, as the impact of a DRO might depend on how long you’ve been in your role and if you handle finances. Also, some professional or licensing organisations might not let you renew your membership if you’ve experienced insolvency.

If you have a mortgage or own a home, you won’t qualify for a debt relief order (DRO). Also, you can’t take out a mortgage while you’re under a DRO.

Typically, a DRO lasts for 12 months. After this period, in theory, you could apply for a mortgage. However, a DRO stays on your credit file for 6 years from its initiation. During this time, it will be challenging to secure a mortgage from a mainstream lender. While it may be possible to obtain one from a specialised lender catering to individuals with poor credit histories, these options tend to be costly.

If you’re considering taking out a mortgage within the next six years, a DRO might not be the best solution for you.

To help us complete your debt relief order (DRO) application, we’ll need details about your financial situation. Initially, we’ll inquire about your income, essential expenses, and debts. It’s important to provide proof of these amounts, so it’s beneficial to gather relevant documents beforehand. These documents may include:

• Wage slips
• Benefit award letters
• Utility bills
• Council tax letter
• Bank statements
• Recent statements from your creditors

Once we have all the necessary information and you’ve paid the £90 fee to the Insolvency Service (which will be waived from April 6, 2024), we’ll proceed to submit your DRO application. The Insolvency Service typically makes a decision within ten working days, equivalent to two weeks.

During your Debt Relief Order (DRO), creditors are generally restricted from taking action against you, except under very specific circumstances.

One such circumstance where a creditor can continue their actions against you is if you’ve established a payment arrangement with a bailiff, such as a controlled goods agreement. In this scenario, your DRO won’t prevent them from seizing and selling your belongings. To retain your possessions, you’ll need to honour the agreed-upon payments with the bailiff.