Debt Relief Orders (DROs) are a debt solution aimed at those on a very low income (less
than £50 left each month after essential expenditure) and with up to £15,000 of unsecured
debt. Once it has been granted, they last for 12 months, during which time; the debtor does
not pay any repayments. Once the DRO is complete, assuming financial circumstances have not
changed, the debt is cleared.
It is vital that, when applying for a DRO, the applicant is both open and honest about their
situation. If the Official Receiver believes the applicant is being dishonest, then the DRO
will not be granted. If the DRO is granted, and then there is suspicion that the applicant
lied about their circumstances, the Official Receiver can apply to the courts for a Debt
Relief Restriction Order (DRRO), which extends the restrictions of the DRO by up to 15 years.
What not to do when applying for a DRO
When considering if a DRRO is appropriate, the court will look at the individuals past conduct,
usually for a period of at least 12 months prior to the application for the DRO.
• Destroying or hiding information and/or documents that could have impacted on the outcome of
the initial DRO application (such as documents that could show the reason for a loss of money).
• Selling or giving away assets at a lesser value than their actual worth in order to deceive
the Official Receiver of their true worth.
• Continuing to run a business that cannot feasibly continue due to the inability to repay debt,
or indeed causing the debt to increase by neglecting the business altogether.
• Failing to provide goods or services to customers that have paid.
• Any form of fraudulent activity.
• Increasing debts due to will full negligence (for example, an individual taking out more credit
despite knowing they will be applying for a DRO).
This list is far from exclusive, and there may be many other examples. The length of the DRRO will
usually depend on the severity of the undertakings of the individual.
Anyone considering a Debt Relief Order, or who has recently applied and is concerned about DRROs should
always seek advice from a licensed money advisor, or one of the free services available, such as the Citizens
Advice Bureau (CAB), National Debtline or the Consumer Credit Counselling Service (CCCS). There is also a
government helpline - the Insolvency Enquiry Line, which can be contacted on 0845 602 9848.