Debt Relief Orders: A Complete Guide
Jan 25, 2024 By Susan Kelly

A DRO (Debt Relief Order) is one way to deal with your debts. Most debts that are part of your DRO don't have to be paid, and your creditors can't make you. A DRO is suitable for one year unless your situation worsens. When the DRO expires, the majority of your obligations will be discharged. You must speak with a designated DRO consultant who will assist you in completing a petition for government action. The advisor cannot pay you for their work; however, applying for a DRO charges £90. If your circumstances change and you can now pay part or all of your obligations, your DRO may be removed so you may negotiate payment arrangements with your creditors. Below we will see what are debt relief orders and how they works?

What A Debt Relief Order Is And How It Works

  • If you have a low income and not much else, it might be possible.
  • Debt is put on hold for a year, and if your situation hasn't changed, it's completely erased.

After a Debt Relief Order is made, you don't have to pay anyone else any more money (your creditors). A Debt Relief Order is only given if it's unlikely that you'll be able to pay off your debts and meet the other requirements.

You Can't Ask For A Debt Relief Order Unless:

  • Your creditors have filed to have you declared bankrupt. However, the hearing hasn't happened (unless your creditors agree that you can still apply)
  • You have been given an Undertaking or a Bankruptcy Restrictions Order
  • You've asked to go bankrupt, but the decision hasn't been made yet. But this doesn't work if you asked the judge for bankruptcy but got a debt relief order instead
  • Do you currently own, or are you attempting to obtain an Individual Voluntary Arrangement?
  • Right now, you don't have any money
  • A Debt Relief Restriction Order and Commitment have been sent to you

If You Haven't Paid Your Rent On Time

Before sending the debt relief orders uk, you should have a plan for paying the back rent. While getting debt advice, it's best to keep the landlord up to date on what's happening. Unless you used a Debt Relief Order, you and the freeholder would usually come up with a plan for you to keep paying off the rent arrears. This is true for people who live in either private or public housing.

If you do this, no one should take you to court. If you don't pay your rent on time, your landlord may start the process of kicking you out.

Check The Terms Of Your Lease

Check the terms of your rental agreement, as it may have an "Insolvency Clause." This means that if you get a Debt Relief Order, you will be breaking your rental agreement, even if you agreed to pay off the arrears. Your landlord could start the foreclosure process.

If you haven't paid your rent on time and are thinking about getting a Debt Relief Order, you should first talk to a debt counselor with a lot of experience. If you can, bring a copy of your lease with you. If you live in public housing, your housing agent and tenancy assistance officer can help you. They can also help you find free and private debt help.

With A Debt Relief Order, You Can Get Free Help

Before getting a Debt Relief Order, you should always discuss things with an experienced debt counselor. This is because the best way to deal with your debts depends on your specific situation and might not be this one. Debt counselors can help you make the right decisions so that most of your money goes toward paying off your debts. So, you might not have as much debt as you thought. A debt adviser will:

  • Everything you say should be kept a secret.
  • Never tell you what to do or try to make you feel bad about yourself.
  • Help you find ways to pay off your debts that you might not have thought of.
  • Ensure you've asked for all the benefits and rights to which you're entitled to.
  • Always make sure that the choice you make makes you happy.

When they get help with their debts, three out of four people feel they have more control over their money. Some debt advice services let you look at your options and choose on your own if that's what you want.