For those on a low income and are struggling to repay up to £15,000 of unsecured debt, a
Debt Relief Order, or DRO, may be a solution to their financial problems. Aimed at
individuals with less than £50 a month after essential expenditure, a DRO usually lasts
for 12 months, after which time, assuming circumstances have not changed, any outstanding
debt is cleared.
When applying for a DRO, it is important that the applicant does the following:
• Provide accurate and correct information. Is vital that all information provided
for the application of the DRO is accurate and correct. Therefore, the applicant must not
fake or destroy any documents that would normally be taken into consideration. This could
include past payslips or valuation of assets.
• Do not withhold information. Withholding information that relates to a potential
change in financial circumstances is not allowed. Always advise the Official Receiver if it
is possible a change in circumstances, such as an expected inheritance, may occur.
• Do not give away or sell assets for a lower value than their worth. As the criteria to
enter a DRO states that the individual must not have any assets totalling £300 or more, giving
away or selling at a lower cost than the actual worth of possessions in order to increase the
likelihood of a successful application, is not allowed.
If the Official Receiver believes any of the above has occurred either in the 12 months leading
up to the application, or after the DRO has been approved, then this would be considered an
offence, and the DRO will either be refused or, in the event it has already started, a Debt Relief
Restriction Order may be applied for. If, however, the applicant is able to prove that they did not
intend to defraud anyone, then they will not be found guilty.
Anyone is considering a DRO, should always seek advice before making a decision. There are a number
of free services available, such as the Citizens Advice Bureau (CAB), National Debtline or the Consumer
Credit Counselling Service (CCCS), who can help, as well as a number of fee charging licensed money
advisors who can provide dedicated support throughout the application process.