Debt Relief Order (DRO)

Applying for a DRO is free and no other fees are involved.

Debts that can be included in a DRO include, but are not limited to the following:

• Credit cards, overdrafts & loans
• Rent, utility bills, telephone bills, council tax and income tax arrears
• Benefits overpayments
• Hire purchase or conditional sale agreements
• Buy now, pay later (BNPL) agreements
• Other bills arrears e.g. for services like vets or solicitors
• Debts owed to friends and family
• Business debts

Entering into a DRO will impact your credit rating for 6 years and will be recorded on the public insolvency register.

When the DRO ends, your credit file will be updated to show that you have been discharged from the DRO period. If your credit file has not been updated to reflect this, you’ll need to contact the credit reference agencies. All accounts that were included in your DRO should be marked as ‘satisfied’ or ‘partially settled’ after the period.

So unless you have outstanding credit issues after the DRO is completed, your credit rating should be clean. The only creditors that will know that you had a DRO after the six-year point are those included in the arrangement who might have kept it on their internal records.

A DRO can be cancelled under certain circumstances, such as if your financial situation changes.

Your debt advisor or insolvency practitioner will be able to help if your circumstances change, for better or worse. There are a few options available depending on your circumstances, and you may be able to extend or cancel your DRO if necessary.

As with many other formal debt solutions, you can’t borrow £500 or more without telling the creditor that you have a DRO. This can make it difficult to borrow money to pay for things during your DRO.

You’ll need to speak to an approved debt advisor or insolvency practitioner to process an application for a debt relief order. They will make sure you meet the eligibility criteria and assess whether this solution is right for you, which may include calculating your total debt, looking at payments made to creditors over the last 2 years and finding out how much money you typically have left over at the end of each month.

If they determine that you are eligible, your adviser will complete an online application for you which is then submitted to the Insolvency Service to be issued or declined.

After the usual 12-month period, your circumstances will be evaluated to work out the next steps for dealing with the debt. If your situation remains the same or has worsened, then the debt included in your DRO will usually be written off completely.