Debt Relief Order (DRO)

What is a Debt Relief Order?

A Debt Relief Order is a formal insolvency solution designed for people who can't pay their debts but don't have the assets or income to pay them off through other routes. It's a creature of the Tribunals, Courts and Enforcement Act 2007 and was introduced as a more accessible alternative to bankruptcy for people in genuine financial hardship.

The way it works is straightforward: once a DRO is approved, your qualifying debts are frozen for a 12-month moratorium period. During that time, you don't have to pay them, and creditors can't take action to recover them. At the end of those 12 months, the debts are written off entirely if your circumstances haven't significantly improved.

DROs are available in England, Wales and Northern Ireland (Scotland has the Minimal Asset Process, which works on a similar principle). They're administered directly by the Insolvency Service via an Official Receiver, with applications submitted through an authorised debt adviser known as a competent authority.

How a DRO works in practice

You can't apply for a DRO yourself directly. The application has to be submitted through an approved intermediary — usually a debt adviser working for a charity like StepChange, Citizens Advice or National Debtline. These advisers are authorised by competent authorities to handle DRO applications, and the service is free.

1. Eligibility check. The intermediary reviews your full situation against the DRO criteria — debt level, disposable income, assets, and recent insolvency history.
2. Application submission. If you qualify, the intermediary submits your application to the Insolvency Service along with the £90 application fee.
3. Approval. The Official Receiver reviews the application. If approved, the DRO comes into force and is added to the Individual Insolvency Register.
4. 12-month moratorium. Your qualifying debts are frozen. You don't pay them, and creditors named in the order can't take action against you for those debts.
5. Discharge. At the end of the 12 months, the qualifying debts are written off — unless your circumstances have significantly improved during the moratorium.

Who is a DRO for?

DROs are aimed at people in tightly defined circumstances. To qualify, you need to meet all of the following criteria (figures correct from 28 June 2024):

• Total qualifying debts of £50,000 or less (the limit was raised from £30,000 in June 2024)
• Disposable income of £75 or less per month after essential expenses (raised from £75 in 2024)
• Assets worth £2,000 or less in total
• A vehicle worth £4,000 or less, if you own one (raised from £2,000 in 2024)
• You've lived, worked, or had a business in England, Wales or Northern Ireland in the last three years
• You haven't had a DRO in the last six years
• You're not subject to any other formal insolvency procedure

If you meet every box on that list, a DRO is often the most sensible route — quicker and cheaper than bankruptcy, with the same end result of debts being written off. If you fall outside any of the thresholds, the intermediary will look at other options with you.

What a DRO costs

From June 2024 the £90 application fee was scrapped. DROs are now genuinely free — there's no fee paid to the Insolvency Service, and the approved intermediaries who submit applications are all free charity services. There's no monthly payment during the moratorium either.

This is a meaningful difference from solutions like IVAs (which have setup and management fees built into your payments) or bankruptcy (which has a £680 application fee). Cost is one of the main reasons a DRO is the right route for people who qualify.

How long a DRO lasts

A DRO runs for a fixed 12-month moratorium period from the date it's approved. There's no extension and no variation — the term is set by statute.

During those 12 months, the DRO is publicly recorded on the Individual Insolvency Register. After discharge, the entry is removed from the register, but the DRO continues to show on your credit file for six years from the date it was made.

Which debts a DRO covers

Most everyday unsecured debts can be included in a DRO. The usual list:

• Credit cards and store cards
• Personal loans and overdrafts
• Catalogue and payday loans
• Rent arrears
• Utility arrears
• Council tax arrears
• Most HMRC debts including overpaid benefits and tax credits

Some debts can't be included in a DRO — they're not affected by the moratorium and remain payable. These typically include:

• Court fines and Crown Court compensation orders
• Child maintenance arrears
• Student loans
• Most secured debts (mortgages, car finance)
• TV licence arrears
• Personal injury damages awards

Your approved intermediary will go through each debt with you and confirm which ones qualify for inclusion in the order.

How a DRO affects your credit, home and work

A DRO leaves a clear footprint. It's a formal insolvency procedure, which means:

• It's recorded on the public Individual Insolvency Register during the 12-month moratorium
• It shows on your credit file for six years from the date it's made
• It can affect future credit applications during that period

If you own your home, a DRO almost certainly isn't the right route — homeowners typically can't meet the £2,000 asset limit. Some employment contracts in financial services, the legal profession or roles requiring security clearance may also have specific rules around insolvency procedures, so it's worth checking your contract before applying.

Crucially, a DRO doesn't release you from debts that aren't covered by it. Court fines, child maintenance and student loans all remain payable throughout and after the moratorium.

If your circumstances change during a DRO

Your obligations don't stop the day the DRO is approved. During the moratorium, you have to tell the Official Receiver if:

• Your income increases significantly
• You receive a windfall (an inheritance, lottery win, redundancy lump sum, etc.)
• You acquire new assets that take you over the £2,000 limit

If your finances improve to the point where you could realistically pay the debts, the Official Receiver can revoke the DRO. That's rare — most people whose DROs are approved are in genuinely fixed long-term hardship — but the duty to disclose is real.

How UK Debt Team can help

We're an introducer, not a debt advice service. Deciding whether a DRO is the right solution — and submitting the application if it is — must be done through an approved intermediary working for a competent authority. That's the law, and it's also why DROs are accessed exclusively through free regulated charities.

Where UK Debt Team adds value is for people who aren't sure whether they qualify, or where another solution might fit better. We can introduce you to a regulated debt solution provider who can talk through your options. If a DRO is the right route, we'll always point you to the free charity services that can handle the application for you. The organisations listed below are the obvious starting point.