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If you are in debt, a Debt Relief Order (DRO) may be a way out for you – but it is best to consider all the options before taking this route, such as a debt management plan, individual voluntary arrangement (IVA) or an Administration Order. See our article: Check your options for getting out of debt
If you owe less than £20,000, don’t have much spare income and don’t own your home, a DRO may be a solution.
If you get a DRO:
You get a DRO from the Official Receiver who is an officer of the Bankruptcy Court. You must apply for a DRO through an Approved Intermediary, who will make the application on your behalf. The application is sent to the Official Receiver and they will decide if the DRO should be granted. The Official Receiver’s fee is £90 and your DRO cannot be processed until the fee is fully paid, although it is possible to pay in installments. In some cases a charity may be able to help you with the cost.
Citizens Advice Bracknell has Approved DRO Intermediaries. It is likely you will need several appointments to get you to the point of applying for a DRO. You need to have evidence of all your debts and be honest about what assets you have as well as getting a credit report. So be prepared, it will take some time.
You’re generally eligible for a DRO if you meet all of these criteria:
While the DRO is in place you must follow rules called ‘restrictions’.
This means you can’t:
If you want to open a bank account, you may also have to tell the bank or building society about your DRO and they have a right to refuse your application or impose conditions and restrictions on the account.
It’s a criminal offence to break the restrictions – you may be prosecuted if you do so.
While you have a DRO you still have to pay:
Your DRO is added to the Individual Insolvency Register – it’s removed 3 months after the DRO ends.
Your DRO will stay on your credit record for 6 years from the date it was granted.
For more information see: Debt relief orders – what you need to know
For help with this or other matters, please contact us via Advice line South on 03444 111 306 or pop in and see us