Debt Relief Order
A Debt Relief Order (DRO) is a formal legal arrangement where your debts (with some exceptions) are frozen for a period of 12 months and then written off.
It is intended for those with a low level of debt and a low income with little or no assets. A DRO allows you to make a fresh start after one year and pre- vents those creditors listed in the DRO application from taking further action against you without the courts permission. You do not need to go to court to apply for a DRO. Crosslight is an approved intermediary who will submit the online application on your behalf.
Automatically free of debt?
Yes, except debts that are excluded from the DRO
Length of time?
12 months
Is there a fee?
£90
From 6 April 2024, this fee will be permanently removed.
Which debts are excluded?
Court fines, CSA obligations, student loans, secured debts, damages, personal injury, Social Funds crisis or budgeting loans, and fraud
Impact on assets?
None, but you cannot have (non- essential) assets, or a vehicle, that are worth more than £2000
Impact on employment?
Some employers may reserve the right to terminate a contract, but this is quite rare
Credit rating affected?
Yes, for 6 years
Am I eligible?
Upcoming changes to DRO rules
The qualifying factors for a DRO are changing on 28 June 2024.
From this date, the maximum amount of debt that an individual entering a DRO can hold will be increased to £50,000.
In addition, the value of single motor vehicle that can be disregarded from the total value of assets an individual seeking a DRO is permitted to own, will also be increased to £4,000.
You owe less than £30,000
You have less than £75 a month surplus income after essential expenses
You have less than £2000 worth of assets (excluding most essential household items) and any vehicle you own is worth £2000 or less
You’ve lived or worked in England and Wales within the last 3 years
You haven’t applied for a DRO within the last 6 years
How do I apply?
You cannot apply for a DRO on your own. You will need an organisation like Crosslight to submit the application on your behalf. We will ensure you fit all the criteria and are given the appropriate advice before submitting a DRO application. In some instances we may be able to secure a grant toward the application fee.
What else do I need to know?
If your financial situation changes within the first 12 months, the DRO may be cancelled and your debts reinstated. This could be if you break any of the conditions of the order, or you have more than £75 a month of surplus income (after essential expenses), or you acquire more assets.
The DRO is entered into the Insolvency Register which is a public record. It is removed three months after the DRO ends
You will not be allowed to borrow more than £500 without telling the lender about the DRO
You cannot act as the director of a company, trustee of a charity, school governor, or solicitor during the DRO period
Feeling overwhelmed by debt or money worries?
Speak to one of our a debt advisors.