Government has launched a re-think on how they can make DROs accessible for those with small pensions, more on this at - Debt Relief Orders - re think about pensions.

The debt relief order is a form of insolvency for people that have a certain amount of debt, little disposable income and few assets.

The debt relief order will help to place the least complicated debt discharge cases on a fast-track through the court system with no personal appearance at court required.

Debt Relief Orders (DROs) became available on the 6th April 2009. 

Who might DROs be suitable for?

People with relatively low liabilities, little surplus income and few assets and who are currently unable to access other forms of debt relief can apply. Those living with parents or in rented accommodation may also apply. Those that have a mortgage and are in negative equity will not be able to apply. So if you are a house owner you are not eligible.

How much will it cost me to get a DRO?

You will have to pay £90, however if you cannot raise the full amount when you apply for the DRO and you are on Job Seekers Allowance, then you will be offered six months to pay the £90 fee.

How can I get a DRO?

By seeking financial advice from a debt advisor and if a DRO appears to be appropriate, an approved intermediary, like the Citizens Advice Bureau, CAB, will be able to help you complete an application. The intermediary may be the same person from whom advice was originally sought, or may be a further advisor that you are referred to once it is considered that a DRO is appropriate.

What are the requirements for a Debt Relief Order?

1. The debtor is unable to pay their debts;
2. The debtor's total unsecured liabilities must not exceed £15,000;
3. The debtor's total gross assets must not exceed £300;
4. The debtor's disposable income, following deduction of normal household expenses, must not exceed £50 per month.
5. The debtor must be domiciled in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales.
6. The debtor must not have previously been subject to a DRO within the last 6 years.
7. The debtor must not be involved in another formal insolvency procedure at the time of application for a DRO, such as:

• An undischarged bankrupt;
• A current Individual Voluntary Arrangement;
• A current Bankruptcy Restrictions Order or Undertaking;
• A current Debt Relief Restrictions Order or Undertaking;
• An interim order
• If there is a current pending debtor's bankruptcy petition in relation to the debtor but the debtor has not been referred to the DRO procedure by the court as a more suitable method of debt relief;
• If there is a current pending creditor's bankruptcy petition against the debtor but the debtor has not obtained the creditor's permission for entry into the DRO process.

Will my car count towards an asset?