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What is a debt relief order?

More than eight million people in the UK are currently over-indebted according to a National Audit Office (NAO) report. This means that more than 12% of the population is unable to pay debts or other household bills.

If you are in debt and are trying to get back on your feet, a carefully drafted debt repayment plan can help you significantly in meeting your goal. However, there are times when this is not feasible, and this is where you might start thinking of other solutions such as those that involve insolvency. One insolvency-based solution that has become quite popular recently is a debt relief order (DRO). 

If it is something you are considering, here are the answers to a few key questions about debt relief orders that I think you should know.

What is a debt relief order?

First introduced in 2009, a debt relief order is a form of insolvency that acts as an alternative to bankruptcy for indebted people on a low income and with limited or no assets. The debt relief usually lasts for one year and during that time, your creditors cannot take any action against you to get their money back.

What is the point of a debt relief order?

If your financial circumstances do not change within a year of being granted a DRO, then all the debts included in it are written off. However, if your circumstances change, meaning that you no longer fit the criteria for debt relief, then the DRO might be revoked and you might ultimately have to make new arrangements with your creditors to pay off your debts.

Who can apply?

You can apply for a debt relief order if:

  • you owe less than £20,000.
  • you do not have spare or surplus income (you have less than £50 left per month after paying for your living costs).
  • you are not a homeowner.
  • the total worth of your assets is less than £1000.
  • you are currently a resident of England, Wales or Northern Ireland or have done business in at least one of these countries in the last three years.

How can you get a debt relief order?

In order to apply for a debt relief order, you must contact an authorised debt adviser. The adviser will check whether you meet specific conditions or criteria and will then apply for the DRO on your behalf. You can get details about authorised debt advisers from several sources, including the Law Society, the Insolvency Service and Citizens Advice.

The debt adviser only helps you apply for the DRO. The actual order is administered by an official receiver through the Insolvency Service. If your application is successful, the DRO will be published on the Individual Insolvency Register. You can get news about the status of your application by visiting the website. Your DRO is removed from the register within three months of it ending. However, it will remain on your credit record for 6 years which can, unfortunately, make it difficult to secure credit during this time.

How much does it cost?

The cost of applying for a debt relief order is £90. You can get details about how to pay from your debt adviser, but in most cases, the fee has to be paid in cash either at a post office or at a Payzone outlet. The fee can be paid either in full or in instalments and is usually non-refundable.

If you are unable to raise the £90 fee yourself, there are some trusts and charities that can help you pay it. Your debt adviser can provide you with more information about these.


A debt relief order can help you get back on your feet if you are currently over-indebted. If you are considering applying for one, the first step is to contact an official debt adviser, who will help you establish whether you meet the criteria for the DRO and then make the application on your behalf.

It is important to note that a debt relief order should not be viewed as a ‘get-out-of-debt-free card’. It should only be a last resort if you are completely unable to make use of a good debt repayment plan due to extenuating circumstances.

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