Are you struggling with debt and not sure where to turn? A Debt Relief Order (DRO) could be the answer. Keep reading to find out everything you need to know about DROs in the UK, including who is eligible, how to apply, and what the consequences are.
What is a Debt Relief Order (DRO)?
A Debt Relief Order is a type of insolvency procedure that is available to people in England and Wales who have debts of less than £20,000, assets of less than £50,000 and a disposable income of less than £50 per month.
A DRO can give you protection from your creditors for a period of 12 months, during which time you will make no payments towards your debts. At the end of the 12-month period, your debts will be written off and you will be released from them.
To be eligible for a DRO, you must not have been subject to an insolvency procedure in the last six years and you must not own your home. You will also need to provide evidence that you have tried to repay your debts but have been unable to do so.
If you are considering applying for a DRO, you should seek professional advice from an accredited debt advisor.
Who is eligible for a DRO?
In order to be eligible for a DRO in the UK, you must meet certain criteria. First, you must be insolvent, which means that you are unable to pay your debts. You must also have less than £50,000 in debt, and your assets must be worth less than £20,000. Finally, you must have a regular income of less than £50 per week (after taxes and deductions). If you meet all of these criteria, you may be eligible for a DRO.
How does a DRO work?
If you live in the UK and are struggling with debt, you may be eligible for a Debt Relief Order (DRO). A DRO is a formal debt solution that can Write Off Debt if you meet certain criteria.
To qualify for a DRO, you must:
-Have debt of less than £20,000
-Have assets of less than £1,000
-Be unable to pay your debts
-Not have been subject to a bankruptcy order in the last six years
If you meet these criteria, you can apply for a DRO through an insolvency practitioner. Once your application is approved, your creditors will be notified and they will not be able to take any further action against you. Your debts will also be frozen.
A DRO will last for 12 months, during which time you will make reasonable efforts to pay off your debts. If you are unable to do so, your debts will be written off at the end of the 12 months.
If you think a DRO may be right for you, speak to an insolvency practitioner to find out more.
What are the advantages and disadvantages of a DRO?
Debt Relief Orders were introduced in the UK in 2009 as a way to help people with debt problems. They are a type of insolvency, which means that they can write off some or all of your debts.
The advantages of a DRO are that:
-You don’t have to make any payments towards your debts for 12 months. This can give you some breathing space to sort out your finances.
-Your creditors cannot take any action against you during this time. This includes things like sending you letters or phone calls, or taking you to court.
-A DRO can be cheaper than other types of insolvency, such as bankruptcy.
The disadvantages of a DRO are that:
-Your name will be put on a public register for six years. This can make it difficult to get credit in the future.
-You might have to give up your car or your home if you own them.
-If your circumstances change and you are able to pay off your debts, you will still have to do this within the six-year period.
How to apply for a DRO
If you’re struggling with debt in the UK, you may be wondering if a DRO is right for you. In this blog post, we’ll explain what a DRO is and how to apply for one.
A DRO is a type of insolvency procedure that can help people who have debts of less than £20,000 and don’t have enough money to repay them. If you’re granted a DRO, your creditors will be legally unable to demand payment from you for 12 months. This can give you some breathing space to get your finances back on track.
To apply for a DRO, you’ll need to fill out an application form and submit it to your local court. You’ll also need to pay a fee of £90. Once your application has been processed, an official receiver will be appointed to oversee your case.
If your application is successful, you’ll be subject to certain restrictions during the 12-month period. For example, you won’t be able to obtain credit of more than £500 without disclosing your DRO status. And, if your financial situation improves during the 12 months, you may be required to repay some of your debts.
Another alternative is bankruptcy. This may seem like a drastic step, but it can be an effective way to get out of debt and start over. Bankruptcy can give you a fresh start by wiping out your debts and giving you the opportunity to rebuild your credit.
No matter what your financial situation is, there’s likely an option that can help you get out of debt and on the road to financial freedom. Talk to a credit counselor or financial advisor to learn more about your options and find the best solution for your needs.
Conclusion
If you’re struggling with debt in the UK, a Debt Relief Order (DRO) may be an option worth considering. A DRO can help you get your finances back on track and can provide some much-needed relief from your creditors. Be sure to speak with a qualified financial advisor to see if a DRO is right for you.
