What is a Debt Relief order (DRO)

A Debt Relief Order (DRO acronym) is aimed at those who cannot afford much, if they do, with their debts, totaling less than £20,000 and do not own a property.

If you meet the criteria so you can have a Debt Relief Order (DRO), it is usually the best option for debt unless you expect your situation to improve much sooner: Free Debt Helpline

The Debt Relief Order (DRO) Criteria

Unlike most other debt solutions, you must be able to meet all the rules for a Debt Relief Order (DRO), there is no "room for maneuver". The most important things are:

• £20,000. You cannot decide to set aside a debt to exceed this limit; this is discussed in this article;

• You cannot have a house;

•  Its assets should be worth less than secondhand £1,000. That sounds almost anything, but common household items and clothing, etc. They are not counted at all and there is an additional allowance for a car, see below;

• You cannot have a car or a motorcycle worth more than £1,000 (using figures Parkers value);

• Must be less than £50 a month extra income after paying all your bills and regular expenses. This is tricky, see below for details.

In addition to these main rules, there are other technical reasons that could prevent you from getting a DRO, including:

The £50 “spare income” test

You may be unsure about the level of 50 pounds of "additional revenue". The level of additional income will be evaluated by the debt counselor that you set your DRO (see below).

Allowable expenses are not the same as commonly used in an IVA or DMP!

I have met people who have had a VAT payment over £100 proposals have been "under £50" on the DRO criteria. If all your income is from benefits or a state pension, then you will pass this test, so you do not have to worry about disability benefits, or PIP like DLA mean having an income too large.

Some people who have been struggling with debt repayments are expenditure allocations that are surprisingly generous: this may be the first time for many years you have money to spend on clothes!