Debt Relief Order Process open to Fraud?
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.
Although DRO applicants should match the basic requirements of a debt under £15,000, assets of £300 or less and monthly disposable income of £50 or less, there is no way to confirm some of the details.
Debt Relief Orders are applied for online, via and an approved intermediary, and do not involve personal meetings. The intermediaries have no right of access to an applicants home, so cannot see if the house is filled with consumer electronics and other high value equipment which will affect the applicant’s asset values.
However, if an applicant is caught attempting to fraud the process in this manner, then the DRO process has a number of potential ways to deal with things.
A Debt Relief Restrictions Order (DRRO) can be imposed which will bind you to the terms of the DRO for between 2 and 15 years, which is similar to a Bankruptcy Restrictions Order (BRO). A Debt Relief Restrictions Undertaking (DRRU) is similar, but the matter does not go to court.