Debt Relief Orders

When you start a Debt Relief Order, there is a Moratorium Period placed on the debts listed in your DRO. But what does this mean, and what are the implications?

As debt relief orders begin to gain traction and become a useful tool in the insolvency practitioners toolkit, some are asking whether the process is open to fraudulent claims, due to the lack of resources and powers of investigation available.

One of the key parts of a Debt Relief Order is that you must have £50 or less disposable income per month. But how exactly do they decide on what your disposable income is? Well a member of Money Saving Expert has managed to find out from a CCCS representative…

A minor point of difference between the details surrounding a Debt Relief Order and full bankruptcy is how pension funds are treated, and this could make the world of difference to your application.

Although none of the approved intermediaries have come and publicly with details on debt relief order uptake, anecdotal information seems to imply that they are all being inundated with applications, to the point that various internal systems crashed badly initially. This has meant that many people applying on, or slightly after the launch date have [...]

Debt Relief Orders can only be applied for via an approved intermediary. These intermediaries have been authorised as being able to assist and advise individuals on the completion of a DRO application. They are authorised by companies considered to be competent authorities. The list below lists the initial list of competent authories issued by the [...]

If you are able to qualify for a DRO, there are some consequences which you will need to be aware of, which may affect how you feel. In reality, these consequences will be nowhere near as bad as the initial debt for many people that DROs are targetted at.

In a new report, KPMG claim that Debt Relief Orders (DROs) could help up to 50,000 in their first year. Personal insolvency is likely to hit in excess of 150,000 during this year, made up of DROs, IVAs and bankruptcy.

You can only apply for a DRO via an approved intermediary. These intermediaries will help you with the online form completion process. Once done, you will need to send a printed and signed copy to the Debt Relief Order Unit, part of the The Insolvency Service that deals specifically with DROs.
You also need to include [...]

Not all debts can be included in a Debt Relief Order, just as you would remain liable to certain debts in a normal bankruptcy.

Court Fines.
Student Loans.
Obligations arising from various drug trafficking offenses.
Secured debts - although with a property, you assets are likely to be more than the £300 minimum assets allowable.