Debt Relief Order (DRO)

What is a Debt Relief Order?

A Debt Relief Order (DRO) is an official order from the Insolvency Service that freezes your qualifying debts for 12 months — known as the moratorium period. During this time, your creditors cannot take any action to recover the money owed. If your financial situation does not improve during those 12 months, the debts included in your DRO are written off in full.

Key Eligibility Criteria

To qualify for a DRO, you must meet all of the following conditions set by the Insolvency Service:

1. 1
   Location You must live or work in England or Wales.
2. 2
   Total Debt Level Your qualifying debts must be £50,000 or less in total.
3. 3
   Disposable Income You must have £75 or less per month in spare income after essential household expenses.
4. 4
   Assets Your total assets (excluding a modest vehicle) must be worth £2,000 or less. You cannot own your own home.

Key Considerations

Before proceeding with a DRO, it is vital to understand its long-term impact:

• !
  Credit Impact A DRO will appear on your credit file for six years from the date of approval, making it difficult to obtain mortgages, loans, or credit during that period.
• !
  Asset Implications While you are permitted to keep basic household items, higher-value possessions may need to be sold or could be assessed by the Insolvency Service.
• !
  Professional Restrictions You may be unable to act as a company director, manage a business, or hold certain professional roles without court permission during the DRO.
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  Public Record Your details will appear on the Individual Insolvency Register during the DRO period and for three months after it ends.
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  Future DRO Applications You generally cannot apply for another DRO for six years after your last one was approved.

How the Process Works

1. 1
   Seek Advice You must first speak with an authorised debt adviser — known as an 'approved intermediary' — who will assess your eligibility.
2. 2
   Application Your approved intermediary helps prepare and submit your DRO application to the Official Receiver on your behalf.
3. 3
   Approval If the Official Receiver is satisfied you meet all eligibility criteria, the DRO is granted and the moratorium period begins.
4. 4
   Moratorium Period For 12 months, creditors cannot take action against you. You make no payments to your qualifying debts during this time.
5. 5
   Discharge If your financial situation remains unchanged after 12 months, your qualifying debts are legally written off.

Is a DRO Right for You?

A DRO is typically appropriate when you are unable to pay your debts as they fall due, have very limited disposable income and assets, do not own property, and other solutions like IVAs or DMPs are not suitable. You must apply through an authorised intermediary — you cannot apply for a DRO directly.

How Debt Free Path Can Help

• Explain how DROs work in England and Wales — including the moratorium period and discharge process
• Help you understand whether you meet the strict eligibility criteria for a DRO
• Compare DROs with other formal and informal debt solutions available to you
• Signpost you to FCA-authorised intermediaries and free debt charities who can guide your application