Debt Relief Order (DRO)
A Debt Relief Order is a low-cost formal solution for people in England, Wales and Northern Ireland who have relatively low debts, little spare income and few assets. If your circumstances don't improve during a 12-month moratorium, the debts included are written off.
DRO eligibility criteria
Rules changed in 2024 and are set by the Insolvency Service. At the time of writing, to qualify in England and Wales you must:
- Owe £50,000 or less in qualifying debts
- Have £75 or less spare income each month after essential costs
- Have assets worth £2,000 or less (a vehicle worth up to £4,000 may be kept)
- Have lived or traded in England or Wales in the last three years
- Not have had a DRO in the last six years and not be subject to another insolvency procedure
Northern Ireland has its own, lower limits. Figures can change – a regulated adviser or approved intermediary will confirm current criteria.
How to apply for a DRO
You cannot apply directly. Applications go through an approved intermediary – typically a debt adviser at Citizens Advice, StepChange, National Debtline or a local advice agency. Since April 2024 there is no application fee in England and Wales. The intermediary submits your application to the Official Receiver, who decides whether to make the order.
What happens during the 12-month moratorium
Creditors listed on the order cannot pursue you for payment or take enforcement action. You must not borrow more than £500 without disclosing the DRO, must not obtain credit through false statements, and must tell the Official Receiver if your income or assets increase. If your situation improves significantly the order can be revoked.
Which debts are covered?
Credit cards, loans, overdrafts, catalogues, council tax arrears, rent arrears (for a former address), utility arrears, benefit overpayments and most HMRC debts. Excluded: court fines, student loans, child maintenance, secured debts and debts from fraud.
Effect on your credit file
A DRO is recorded on your credit file for six years from the date it is made and on the Individual Insolvency Register for three months after it ends. It will be harder to obtain credit, a tenancy or some types of employment during this time.
Frequently asked questions
Does a DRO cost anything?
In England and Wales the £90 application fee was abolished in April 2024. The approved intermediary's advice is free.
Can I get a DRO if I own my home?
Normally no – owning property, even with negative equity, usually exceeds the asset limit. Homeowners should consider other solutions such as an IVA or bankruptcy.
What if my debts are over £50,000?
You would not qualify. An IVA or bankruptcy may be appropriate, and in Scotland the Minimal Asset Process has its own limits.
Will my employer or landlord find out?
Your name appears on the public Insolvency Register. Some employment contracts and tenancy agreements require you to disclose insolvency – check yours.
Want to know if this applies to you?
Free enquiry. No obligation. Regulated advice before any decision.