What Is a Debt Relief Restrictions Order (DRRO)?

If you’ve violated the restrictions of your Debt Relief Order (DRO) or acted dishonestly, you might find yourself subject to a Debt Relief Restrictions Order (DRRO).

A DRRO is a court order that can extend the period of time you have to follow the restrictions of a DRO. It also places some additional restrictions on you.

In this guide, we’ll be explaining the process, stipulations, and potential consequences of a DRRO.

What Is the Process of a Debt Relief Restrictions Order?

Official Receiver Issues a Warning

The official receiver will contact you to let you know they’re considering having a DRRO made against you before they apply to court. They’ll invite you to a meeting which can be conducted in person or over the phone.

You can use this as an opportunity to explain yourself and provide evidence of your proper conduct. It’s a good idea to bring your DRO advisor along with you.

Official Receiver Applies to the Court

When the official receiver applies to have a DRRO issued against you, they have to send you a letter explaining why they’re making the application. You’ll have 21 days to respond.

If you accept the allegations made, you’ll be entered into a “Debt Relief Restrictions Undertaking” (DRUU). A DRUU has the same consequences as a DRRO but is typically less severe.

If you deny the allegations, you’ll proceed to have a court hearing.

A Court Hearing Is Scheduled

You’ll be given at least 8 weeks’ notice of the court hearing. When you receive this notice, you’ll have 14 days to acknowledge the hearing through the form you’re sent. If you don’t acknowledge the hearing, it will proceed without you.

Evidence Is Filed

You get 28 days to submit your evidence after you’ve received notice of the court hearing.

You’ll have to submit this evidence to the official receiver within 3 days of it being sent to court – they may submit further evidence in reply to this.

If you’re unsure you have enough evidence to support your case, you can always change your mind; you can choose to enter into a DRUU right until the actual court hearing.

Decision Is Reached

Once you reach the end of your hearing the court will decide whether or not to charge you with a DRRO. The severity of any charge will depend on the gravity of the allegations.

How Can I Get a Debt Relief Restrictions Order?

There are many ways you can find yourself facing a Debt Relief Restrictions Order. The official receiver may believe you’ve violated the restrictions of your Debt Relief Order, or they may think you’ve been acting dishonestly.

Breaking the Restrictions of a Debt Relief Order

Violating any of the restrictions of a Debt Relief Order can result in you being charged with a DRRO. But what are these restrictions?

Under a DRO, you are restricted from:

Borrowing over £500 without telling the lender about your DRO
Acting as a company director
Creating, managing, or promoting a company
Trading under a new business name without telling people you’re in a DRO

If you think you’ve violated any of these restrictions, you should speak to your DRO adviser right away.

What Other Actions Can Violate a Debt Relief Order?

Generally speaking, any actions that may be considered dishonest can see you end up on the receiving of a DRRO. But what are these actions?

Here are a few examples:

Taking on debts you knew you couldn’t repay
Giving away or underselling valuable items
Hiding valuable items
Making preferential payments between creditors
Failing to declare assets you gained while in the DRO
Failing to cooperate with the official receiver

It’s important to remember that this isn’t an exhaustive list; any action that could be viewed as financially dishonest could see you get a DRRO. If you’re uncertain about anything, get in touch with your DRO adviser.

Who Will Know About My Debt Relief Restrictions Order?

The official receiver will inform all of your creditors that you’ve been issued with a Debt Relief Restrictions Order. This may result in further complaints being made against you.

The DRRO will also be publicly listed on the Individual Insolvency Register. This listing will remain on the register for as long as the DRRO lasts, plus an additional 3 months after it has finished.

Your DRRO may also be advertised through a press release.

What Are the Consequences of a Debt Relief Restrictions Order?

The DRO restriction period will be extended from anywhere between 2-15 years. This means you’ll have to stick to restrictions for much longer.

You’ll also be subject to additional restrictions:

Can’t work on education committees
Unable to work on healthcare committees
Can’t work in public office
Cannot be the trustee of a charity or pension scheme

What Happens if I Violate My Debt Relief Restrictions Order?

Once you’re charged with a Debt Relief Restrictions Order, you’re legally obligated to adhere to its restrictions. Breaking them is a criminal offence and can have severe consequences:

Your restrictions may be extended again
You may be issued with large fines
You could potentially be imprisoned

You should always consult your DRO adviser if you think you’re at risk of violating your DRRO. If you ensure you’re upfront and honest throughout the restriction period, you should be okay.

How Can I Protect Myself?

To make sure you’re protected, keep your DRO adviser informed of any changes in your financial position at all times and avoid any deceptive behaviour.

If you feel sticking to the DRO restrictions isn’t possible – maybe you want to carry on trading, etc. – you should get in touch with one of our insolvency practitioners. You may find that an alternative debt solution such as an IVA is better suited to your needs.

Get in touch today to book a free consultation.

FAQs

What Is a Debt Relief Restrictions Undertaking (DRRU)?

You are entered into a Debt Relief Restrictions Undertaking when you accept the DRRO allegations raised against you by the official receiver.

A DRRU has the same consequences as a DRRO, but the sentencing is typically more lenient as you’re demonstrating honesty and helping to save on court costs.

What Is an Interim DRRO?

An interim DRRO applies restrictions while the court makes a decision on your case. It applies the same restrictions as a DRRO and is lifted if the court decides not to charge you.

What Happens if My DRO Ends before My Court Hearing?

If your Debt Relief Order ends before your court hearing, you assume you’re off the hook – however, this isn’t the case.

Instead, the court will likely issue an interim DRRO against you. If you’re found liable at court, you will have to adhere to restrictions until the DRRO ends.