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What is a Debt Relief Order? Know How to Apply for a DRO

What is DRO or Debt Relief Order uk is one of the safest ways that help you to deal with your debts when you owe less than the amount of £20,000. If you have a few assets and the debt is comparatively low, then with the help of Debt Relief Order, you can write off the debts easily.

If you get qualified, then contact the expert DRO team and get insolvency service from them. When you are going to rent a home and have little spare income, then without any doubt, the Debt Relief Order is the best option to deal with.

Time Period of Debt Relief Order:

Debt Relief Order uk mainly lasts for twelve to twenty-four months. It depends upon the source of your income and the amount of debt you owe. Contact a DRO expert and they will help you to choose the correct DRO plan for you.

Unless you fail to pay the amount in the end, your creditors will not give you any pressure within twelve months.

At the same time, you have to maintain your finances and have to make payments in regular months. It will help you to avert from another debt reduction plan.

Restrictions Imposed on Debt Relief Order:

Debt Relief Order helps to avail specific profits, but need to be ready to accept a few restrictions as well. Like, if you live in Scotland, then you aren’t eligible to apply for DRO.

Unfortunately, if you get bankrupted or suffer from any sort of financial crisis, then applying for DRO is the right decision for you. 

How to Apply for Debt Relief Order?

If you have already decided to apply for a DRO, then at first, you have to get in touch with a DRO adviser and tell them to make your application to the Insolvency service.

Step 1: Find a DRO Adviser

Through an “Approved intermediary”, you can contact a DRO specialist. They will give you permission to complete all the rules and regulations. They also give advice regarding DROs. After that, they will check if you are qualified to apply for DRO or not.

Step 2: Work with the DRO Experts

The experts of the Debt Relief Order UK will tell you if you are eligible for applying DRO or not. As well as they will tell you which DRO plan is most suitable for you. If you proceed further, then you have to fill up the DRO form and provide the correct information in the application form.

But in case if it shows you are not eligible for applying DRO, then you will definitely get back the payment fee.

Then the application will be sent at the Insolvency Service by an official receiver. But if the recipient finds any dishonesty or any fraud information, then your DRO may last up to fifteen years as well. Sometimes, you might be taken to court in case of dishonesty.

Step 3: Make the Payment

For applying for a DRO, you need to pay £90 in cash or via the Payzone outlet. You can also pay this amount in installments if you are not willing to pay the lump sum at a time. But remember that you will not get back your money once your application is turned down.

Step 4: Know the Officer’s Decision

After completing the payment, the official receiver will make a decision that is right for you. You need to co-operate with the receiver by answering all the questions asked to you and also provide any further information to complete the DRO process.

How long DRO Takes to Process?

Once you have provided all the correct information and fill up the application form it goes to the DRO Approved Intermediary for the approval. Then it will be sent to the Insolvency Service.

Complete the payment and it will take almost ten to fifteen days depending on the basis of your application. 

Advantages of DRO:

There are multiple advantages if you apply for DRO. Let’s take a look at the advantages that are mentioned below.

  • A DRO relieves you from anxiety and stress of calls and notifications.
  • Your creditors will be liable to the agreement.
  • Creditors can not take any further action without taking your permission.
  • You don’t need to make the payment on a monthly basis.
  • A DRO is an alternative to low-cost bankruptcy.
  • You don’t have to appear in court as the DRO is a formal debt solution.
  • After applying for a DRO, all the charges and interests regarding your debts that are covered by DRO will be frozen for a certain duration.
  • You do not need to go to the court to apply for a DRO.

Few Risks Involved with DROs:

In spite of the benefits, there are few advantages to what some people are not willing to choose DRO.

  • If you forgot to pay DRO, then no provision will be added to your debt.
  • If you have your own home, then you are not eligible to apply for DRO.
  • You can not write off all types of debts.
  • To apply for DRO, you must have an income of less than £50 per month.
  • If you are living only in England, Northern Ireland or Wales, then you will be eligible for DRO.
  • In the case of dishonesty, you might encounter “debt relief restrictions order” and must appear in court.
  • If you entered any false information, then the official receiver can take legal steps against you.

What Debts are Covered in DRO?

Most of the debts are covered in the Debt Relief Order such as council tax, credit card, debit card, household utility bills, etc. The debts that are not included in your DRO are known as Excluded Debts. 

Some Excluded Debts are listed below.

  1. Child maintenance
  2. Criminal files
  3. Loans from DWP Social Fund like budgeting loans
  4. TV license arrears
  5. Fraudulent debts

Who is Eligible for Applying for DRO?

  • After paying the household bills, if you have £50 or less additional income every month, then you can apply for DRO.
  • In case your debts are £20,000 or less, then you can apply for DRO.
  • Your total asset is worth £1000 or less? Congratulations you are eligible for Debt Relief Order.
  • If you already had a DRO in the past six years, then consult with the DRO advisor. In that case, you might not be able to apply for DRO.