What a Debt Relief Order is
A Debt Relief Order (DRO) is a formal debt solution in England and Wales, administered by the Insolvency Service. It is a legally binding process designed for people with relatively low levels of debt, little spare income and few assets.
Once a DRO is approved, debts covered by the order are frozen for 12 months. If the applicant's circumstances have not changed at the end of that 12-month moratorium period, the listed debts are written off.
Three changes in 2024
The government announced changes to DROs in the 2024 Spring Budget. These were delivered in two stages.
1. £90 application fee abolished — 6 April 2024
Before April 2024, anyone applying for a DRO had to pay a £90 administration fee. From 6 April 2024 the £90 fee was abolished entirely. The Insolvency Service stated that people who need DROs typically have very little disposable income, so even the £90 fee was a meaningful barrier.
2. Debt threshold raised from £30,000 to £50,000 — 28 June 2024
Before June 2024, the total amount of debt covered by a DRO could not exceed £30,000. From 28 June 2024 this rose to £50,000, widening access to DROs for more people who would otherwise have needed to consider bankruptcy.
The statutory instrument that enacted this change was the Insolvency Proceedings (Monetary Limits) (Amendment) Order 2024 (SI 2024/626).
3. Vehicle value limit raised from £2,000 to £4,000 — 28 June 2024
Before June 2024, an applicant could own a vehicle worth up to £2,000 without it affecting their eligibility for a DRO. From 28 June 2024 this limit doubled to £4,000. The statutory instrument was the Insolvency (England and Wales) (Amendment) Rules 2024 (SI 2024/622).
The Insolvency Service stated that vehicle values had risen substantially in the years before the change, and that many people rely on a car for work, mobility or family reasons.
How DROs are applied for
DROs can only be applied for through an approved intermediary — a regulated debt adviser authorised to prepare and submit the application on the applicant's behalf. The Insolvency Service maintains a list of approved intermediary bodies. Free regulated debt advice providers such as StepChange and Citizens Advice have approved intermediaries.
What a DRO affects
If approved, a DRO stays on the public Insolvency Register for the 12-month moratorium period. It remains on the applicant's credit record for six years from the date the DRO is made. During the moratorium, creditors listed on the DRO cannot take action to recover those debts, and interest and charges on those debts are paused.