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 a £90 non-refundable payment to cover processing costs. This must be paid in cash if you are paying it, or by cheque if a charity is paying the charge on your behalf. As DROs come into being, we will find out what charities are helping people.
Not all debts can be included in a Debt Relief Order, just as you would remain liable to certain debts in a normal bankruptcy.
Debt Relief Orders come into force on 6th APril 2009, and they are aimed at people who in relatively low levels of debt, but have low income, few assets and are unlikely to be in a position of paying off their debts in a reasonable time frame.