More young people are now turning towards a new form of bankruptcy called  Debt Relief Order, or DRO to help them with unmanageable debts.

The DRO was first introduced in April 2009. In the period from April 2009 to September 2011 more than 58,000 people have applied for a DRO. The Insolvency Services have carried out a survey of 44,000 people who were granted a DRO, and have found that 1 in 4 of these people are aged between 25 and 34 and these figures are set to rise. These figures show that more and more young people are struggling with the burden of debt.

A DRO works in a similar way to bankruptcy, but it is designed for people with debts of less then £15,000 and a disposable income of less then £50. You must also not have any assets worth more then £300, although certain assets do not apply such as clothing, furniture and a vehicle worth less then £1,000.

A DRO lasts for one year, at the end of which you will be released from your debts.

The main advantages of a DRO is that they only last a year and the fee is only £90 which can be paid in installments. None of the creditors on a DRO can take further action against you, and you are entitled to keep assets as detailed above.

There are some disadvantages to a DRO. For instance you cannot opt for a DRO if you are a homeowner, and your DRO will be entered onto a public register in the same way a bankruptcy would be. You will also be committing an offense if you obtain credit of more then £500 without disclosing that you are subject to a DRO. Also, if found that you have acted recklessly or irresponsibly in incurring your debt you could have a Debt Relief Restriction Order made against you for a period of between 2 to 15 years.

We have a great rescue culture and there are a range of possible debt solutions that could be right for you. If you find yourself in trouble with debts, you should consider speaking to a financial advisor who can help assess your situation. Call The Debt Advisor today to discuss your options or visit www.thedebtadvisor.co.uk