A Debt Relief Order (DRO) is a form of insolvency which is designed to help people who have relatively low debt, little surplus income and few valuable assets – and who have no realistic chance of paying off their debts within a reasonable time.

Available as of 6th April 2009, a DRO will last for 12 months:

during which, any creditor named on the order cannot take any action to recover their money unless they have the court`s permission, and
after which, the individual will be freed of the debts included in the order (unless their circumstances have significantly improved).
DROs don`t involve the courts, and are run by The Insolvency Service in partnership with debt advisers known as `approved intermediaries` – the people who actually help individuals apply to the Service for a DRO.

Would a Debt Relief Order be suitable for me?
As The Insolvency Service website (insolvency.gov.uk) states, a Debt Relief Order is suitable for people who don`t own their own home – but this isn`t the only condition.

People can only enter a DRO if they meet the following conditions:

They must be unable to pay their debts.
They must not owe more than £15,000.
The total value of their assets must not exceed £300 – although they can own a car worth up to £1,000.
Their disposable income (after tax, national insurance contributions and normal household expenses) must not exceed £50 per month.
They must live in England or Wales – or have lived / carried out business in England Wales at some time in the last 3 years.
They must not have been subject to another Debt Relief Order in the previous 6 years.
They must not be involved in another formal insolvency procedure at the time they apply.
Would a Debt Relief Order write off all my debts?
Some debts cannot be included in a DRO – such as :

Magistrates` court fines,
Student loans, and
Secured debts (debt secured against property)
Secured debts are unlikely to be an issue anyway, as owning property would probably mean you`re not eligible for a Debt Relief Order, as your assets would almost certainly be worth more than £300.

Does a Debt Relief Order come with any restrictions?
Yes – similar to the restrictions you would face if you were declared bankrupt. For example, you would not be able to obtain credit of £500 or more without declaring that you`re subject to a DRO.

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Speak to an expert today
Call freephone: 0800 161 3516The above looks like an advert for GP who are a private company. Its far better to get some impartial advice on a DRO from the CAB or another organisation which isn't sales based.

These are the official government leaflets

http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/droguide.pdf
http://www.insolvency.gov.uk/guidanceleaflets/DROFlyer.pdf

or you can post on www.talkaboutdebt.co.ukYou have a clear explanation from one answerer (along with an advert) and some good advice regarding the citizens advice bureau. You dont say what your debts are, but if they are credit cards or personal loans it may be possible to get them legally cancelled altogether. I used www.bdebtfree.info and they were a great help.A Debt Relief Orders are intended to provide debt relief for people in England and Wales who owe 15.000 pounds or less, have little or no income, no assets and can not afford to make themselves bankrupt.

 

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