Debt Relief Order

Debt relief orders (DROs) are a new form of insolvency measure in the United Kingdom. They were introduced under Chapter 4 of the Tribunals, Courts and Enforcement Act 2007. A DRO is a simplified, quicker and cheaper alternative to bankruptcy in the United Kingdom, suitable for debtors who have few or no assets (less than £1000 and not homeowners) and little disposable income (less than £50 per month). It is possible to apply for a DRO without attending court and the fee is £90. The fee may be paid by instalments prior to applying for the order.

Debt relief orders came into force in England and Wales on 6 April 2009.

Debt relief orders are intended to provide debt relief for people in England and Wales if:

A debt relief order is a form of insolvency, like bankruptcy, and will be subject to a public listing through the Insolvency Service website.

Debt relief orders can only be completed by an approved intermediary and competent authorities. Approved intermediaries will be mainly experienced debt advisors attached to debt advice organisations such as a Citizens Advice Bureau, the Consumer Credit Counselling Service or an AdviceUK member. The approved intermediary can review the persons information, make a determination that they are eligible and appropriate for a DRO and file the DRO application online. Approved intermediaries will not charge a fee for completing or submitting an application.

Organisations approved by the Insolvency Service as competent authorities are listed on the Insolvency Service web site, and include AdviceUK, Citizens Advice, StepChange Debt Charity, the Institute of Money Advisers, Baines and Ernst National Debtline, Payplan and Think Money.

Upon receipt of the application and payment of the fee, an Official Receiver may make the order, administratively, without the involvement of the court if it appears that the applicant meets the requirements.

If the Official Receiver becomes aware of information which means the debtor does not qualify for a DRO, the application will be refused. If this information comes to light after the DRO is made, the Official Receiver may revoke the DRO without reference to the Court. The effect of revoking a DRO will be to leave the debtor open to actions by his or her creditors. If a DRO is revoked the debtor cannot apply for another one within six years.

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Wikipedia