What Is A Debt Relief Order

You may have come across this term called “Debt Relief Order“. Briefly, a debt relief order is an order which you can consider applying for when you cannot afford to pay off your debts. Granted by the Insolvency Service, it is a cheaper option compared to going bankrupt.

In order to qualify for a Debt Relief Order, your debts must not exceed £15,000 and you must be a low income earner. A debt relief order usually lasts for a year and during that time, none of your creditors will be able to take action aginst you to get their money back. At the end of the year, you’ll be free of all the debts listed in the order.

There are further conditions which you must fulfil if you intend to apply for a debt relief order :

* your ownership of things or value must be less than £300
* if you do own a vehicle, it must not exceed £1,000 in value
* your private pension fund is worth less than £300.

Contact an authorised adviser to apply for a DRO. He will check whether you qualify to apply for the Debt Relief Order and if you do, he will apply for the order on your behalf. The Order costs £90 but you can pay this via 6 monthly instalments.

In the next couple of articles, we will provide you more information on the following:

* who is eligible for a debt relief order
* who can’t apply for a debt relief order
* what type of debts can be included in a debt relief order
* how to go about appying for a debt relief order
* what happens during a debt relief order
* things you should do during a debt relief order
* things you can’t do during a debt relief order
* what happens after a debt relief order finishes.