Debt Relief Orders. Is it right for you?


A debt relief order is a way to get your debts written off. If you have a low level of debt and have few assets or if you have qualified our specialist Debt relief Order team can apply to the Insolvency Service for you.

If you live in Scotland, debt relief orders will not be an available option for you. In Scotland, a Minimal Assets Process (MAP) bankruptcy is a similar solution, but It is important to note that it has different risks, fees and benefits associated with it.

What is a DRO?

A debt relief order is a method for avoiding the payments of the debts in cases where you have low financials as well as minimum number of assets that can be used for paying of the debts.

Benefits Drawbacks
• One of the pertaining advantages of DRO is the freezing the debt payment for a specific period of time.. • The DRO is only an available option for you if you have a collective amount of £20,000.
• A Debt Relief Order allows you to pause the payments of the debts towards your creditors for at least 12 months. • In addition, you are required to live in England, Northern Ireland or Wales for obtaining a Debt Relief Order (DRO).
• You can resume your potential workability without worrying about the repayments of your debts. • The initial fee for requesting insolvency is £90, which you will need to pay.
• With the freezing of the payments, you can utilize your remaining assets for managing your finances.. •The insolvency agency that you have contacted will look into your profile and will approve or reject your application.
• There is no need to appear in the court even with formal debt solution as DRO. • The DRO will appear on the public register. This will affect your reputation in terms of credit report.

How does a Debt Relief Order (DRO) work?

Intermediaries including debt advisors that approve or reject your proposal for the order can only improve the DRO. Debt advising organizations offer the services of acting as intermediaries and allowing the assessment of your proposal with your pertaining situation. We at Free Debt Helpline also provide the services of intermediary advisors, helping you with a proposal for your Debt Relief Order (DRO).

Once the intermediary consultant has approved your application, the intermediary will file for the DRO application. The intermediary will not charge a processing fee in terms of completion or application submission.

The Official Receiver will initiate the order for pausing of the payments, once you have received the receipt of the application as well as of the fee. The Official Receiver will administer the order without the involvement of the court in case you have met the requirements of the order.

With the ignition of the order, you, as well as your insolvency administer will receive the notice regarding the terms and conditions of the DRO. This will nominate the duties as well as restriction imposed with the order.

Adding an entry to the Electronic Individual Insolvency Register will allow you to monitor the details of your DRO. In case your name on the register can cause adverse circumstances to you or your associated member, you can request the court to remove your name form the register.

Payments in DRO:

During the period of your Debt Relief Order, you are not required to make debt payments to your creditors. However, some exceptional payments are to be made even with the DRO in effect. These include:

 Payments to your property owner for the house or land you have rented.

 Payment to bailiffs or enforcement agents, that have taken control of your belongings as a result of goods agreement.

 Normal household payments including council tax, utility bills, rents etc.

 Debts that are not included in the DRO statement.


Learn more about Debt Relief Orders:

 

DROs are for people with few assets and have a low level of debt. The criteria to apply for a DRO is different depending on where you do you reside:

  • If you live in either in England, Wales or Northern Ireland you might be eligible if you owe £20,000 or less and have £1,000 or less in assets (and a car worth £1,000 or less).
  • You must also have £50 or less in surplus income per month. A DRO is a cheap alternative to bankruptcy.
  • If you live in either in England, Wales or Northern Ireland then you could apply for DRO. If you live in Scotland, read our debt advice in Scotland page for more information on the solutions that are available to you.

 

DRO freezes your interest and debt repayments for at least 12 months. If your financial situation has not changed at the end of this period then your debts will get written off.


DRO costs £90. It is the amount charged by the Insolvency Service to process an application for DRO. You cannot receive any discounts or exemptions like you could with bankruptcy , so the full amount of £90 has to get paid before they submit your application.

The fee can either be paid in instalments over a 6-month period or one lump sum. Once they receive your payment of the fee and you got submitted your application. you cannot get your money back, even if DRO is either rejected or revoked.

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