Category: Debt Relief Order
A Debt Relief Order (DRO) is a formal debt solution available in England, Wales, and Northern Ireland, designed to help individuals who are struggling to repay their debts and have little or no assets. It is a form of insolvency, and once approved, it can provide a fresh start to those who are burdened with unmanageable debts.
To be eligible for a DRO, the debtor must have a total debt of less than £20,000, assets worth less than £1,000, and disposable income of less than £50 per month after paying for essential living expenses. The debtor must also live in England, Wales or Northern Ireland, and cannot have been subject to certain other insolvency procedures in the previous six years.
If approved, a DRO will put a hold on the debtor's debts for a period of 12 months, during which time the debtor must make no payments towards the debts. After the 12 months, if the debtor's financial situation has not improved, the debts will be written off, and the debtor will be debt-free.
A DRO is a relatively low-cost option compared to other forms of insolvency, and can usually be obtained through a debt advisor or insolvency practitioner. However, it is important to note that a DRO will negatively impact the debtor's credit rating, and may limit their ability to obtain credit in the future.
Overall, a Debt Relief Order can be a viable option for individuals who are struggling with unmanageable debts and have little or no assets. It provides a fresh start and the opportunity to become debt-free within a relatively short period of time.