Debt Relief Orders

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.

The Debt Relief Order rules of acceptance state that you cannot have assets values at more than £300 (apart from specifci exclusions that are covered by the legislation). Initially, it was thought that pensions would be treated as per full bankruptcy, i.e. they wouldn’t be included in the assets.

However, it appears that for a DRO, pension pots are included in the calculation of your asset pot. And lets face it, if you have a pension at all, it’s likely to  be worth more than £300. This also applies if you opted out of serps years ago.  Since then, all of your contributions have been building up in a kind of private pension and is almost definately going to be more than £300.

Just make sure that you don’t forget to mention any pensions you may have (you don’t need to be drawing on them yet for them to be a problem) to your approved intermediary!