Why choose a Debt Relief Order?
Debt Relief Orders (DRO’s) are available if you have little in the way of assets or disposable income.
In order to apply for a DRO the following specific conditions apply:
- You have debts of no more than £30,000
- You have assets of less than £2,000
- Your disposable income is less than £75 per month
- You have not applied for a DRO within the past 6 years
- You will have lived or worked in England and Wales within the last 3 years
- A DRO is often described as ‘bankruptcy lite’
- The costs of application are lower than bankruptcy
- The restrictions are similar to those of a bankruptcy
In short, a DRO is an effective remedy if the alternatives are not feasible and you satisfy the conditions.
A DRO enables you to be free from the pressure of your creditors, provided you satisfy the conditions for application. (See Why Choose a DRO).
Unlike a bankruptcy, in a DRO you do not have a specific trustee who administers your affairs.
The system relies on you to provide accurate information about your debts and assets and that you satisfy the criteria.
Once in a DRO, certain restrictions apply. These are similar to bankruptcy in that you cannot:
- Borrow more than £500 without telling the lender about your DRO
- Act as a director of a company
- Create, manage or promote a company without permission of the Court
- Manage a business without telling those you do business with about your DRO