Opting for a Debt Relief Order needs careful consideration.
We realise that dealing with debt is a particularly difficult, stressful and confusing time. It makes sense to talk to family or a trusted friend but we know this is not always possible. If you are struggling with debt stress, we recommend you read helpful information which offers help and advice on dealing with debt stress.
The decision should only be taken after you have taken independent advice from a practice regulated by the Financial Conduct Authority to offer debt counselling advice. The prime reason is that your affairs will be investigated and if your behaviour prior to the DRO is found to be dishonest whereby you have gifted away assets, or been dishonest with your application, you could face a Debt Relief Restrictions Order.
If after consultation, DRO appears the most appropriate solution, it will be necessary to apply to the Official Receiver at The Insolvency Service.
You can apply for a DRO through a specialist DRO Adviser called an approved intermediary. They are licensed to advise on DRO’s and you can find a local DRO adviser by checking on www.bis.gov.uk
Your DRO advisor will help you put your application together and they will need detailed information on your assets, debts, income and outgoings. It is vital that the information you provide is accurate and honest as the Official Receiver can refuse your application and your fee of £90 will not be refunded. The fee is payable at a Post Office or a Payzone outlet.
If you cannot afford the fee of £90 there are charities including www.turn2us.org.uk who may be able to help.
Official Receiver’s Decision
The Official Receiver will consider your application and will either grant the DRO, defer the order if more information is needed or refuse the order if they believe the information is incorrect or false.
If your DRO is granted you will receive notice and this will remind you of your duties and the restrictions that exist while the DRO is in force. Your creditors will be notified and your details will be added to the Individual Insolvency Register (EIIR) showing that a DRO has been made against you.
A DRO normally last 12 months and during this period you do not have to make payments to your unsecured debt included in the DRO. You will need to keep paying your normal household bills including rent, utilities, council tax.
During the period of your DRO there are certain things you cannot do:-
- Obtain credit for more than £500 without telling the lender you have a DRO
- Carry on business under a different name from the one under which the DRO was made
- Be involved in the formation, promotion or development of a limited company
- Act as a director of a limited company without the leave of the court
If your circumstances do not change during the 12 months of the DRO,
Is there anything else I should know?
All debt solutions should be very carefully considered. There are other solutions to be considered including DMP, IVA, Bankruptcy, Debt Consolidation through raising Finance and Dealing with Creditors Directly.
Fees will be charged if a solution is taken in order for us to set up your plan and maintain it – all fees will be outlined during your consultation. For further information on fees, please see the FAQ section of the different solutions available. Retained payment may place you further into arrears. You have the right to a cooling off period of 14 days. It is likely that your ability to obtain further credit in the short term will be affected and this may also be the case over the medium to long term. Calls to our free phone number from mobile phones and other networks may be charged.
The Insolvency Service website has helpful information on https://www.gov.uk/options-for-paying-off-your-debts/overview to support those who find themselves in financial difficulty during the recession.
There are sources of free debt advice and services. You can find out more by contacting the Money Helper Website or 0800 138 7777.
More about DROs
Do you need help?
Specialist advisors are available who can advise you on the most appropiate solution to bring you relief from debt