A debt relief order is an alternative to bankruptcy for people struggling with debts of less than £20,000.

What is a debt relief order?

A debt relief order is only available to people who have a disposable income of £50 or less per month and personal assets worth less than £1000. Motor vehicles worth less than £1,000 will generally not be included in this limit.

How to apply for a debt relief order

With MoneyPlus, we can help manage your debt relief application as long as you meet the criteria above. If a debt relief order is the right debt solution for you and you decide to go ahead with it, alongside MoneyPlus we will go through your application assessing any debts and assets you have.

Once this has been done, the debt relief form application will be filed at a cost of £90. This is paid in cash to the Post Office or a Payzone outlet and can be paid either in full, or in instalments. Once your application has been submitted, the official receiver will make a decision whether to make the debt relief order if your application is accepted or refuse the order if not.

What debts count towards a debt relief order?
  • Unsecured debt – Loans, credit cards, store cards, overdrafts, payday loans.
  • Household debts – Rent, utilities, telephone, council tax.
  • Finance – Hire purchase, credit agreements, buy now pay later agreements.
Who is a debt relief order suitable for?

Individuals with relatively low liabilities, small surplus income and few or no assets and who are possibly not in a position to pay off their debts in a reasonable time.

Criteria for a debt relief order
  • Unable to pay their debts.
  • Total unsecured debt must not exceed £20,000.
  • Total gross assets must not exceed £1000.
  • Disposable income, following deduction of normal household expenses, must not exceed £50 per month.
  • Live in, or in the last 3 years have been resident or carrying on business in, England or Wales.
  • Must not have previously been subject to a debt relief order within the last 6 years.

The debtor must not be involved in another formal insolvency procedure at the time of application for a DRO, such as:

  • An undischarged bankrupt.
  • A individual voluntary arrangement.
  • A bankruptcy restrictions order or undertaking.
  • A debt relief restrictions order or undertaking.
  • An interim order.
  • A pending debtor’s bankruptcy petition in relation to the debtor but the debtor has not been referred to the DRO procedure by the court as a more suitable method of debt relief.
  • A current pending creditor’s bankruptcy petition against the debtor but the debtor has not obtained the creditor’s permission for entry into the DRO process.
Not sure which debt solution is right for you?

Finding the right debt solution can often be a daunting task – that’s where we come in!

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Our advisers are all trained to help you find the best solution to your financial situation.

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The Money Advice Service

To find out more about managing your debt and receiving free debt advice visit moneyadviceservice.org.uk or read the article Options for Paying off your Debt.

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