What is a Debt Relief Order?

A Debt Relief Order (DRO) is a form of debt relief for people who owe less than £30,000, have very few assets (less than £2,000, or £4,000 including a vehicle worth up to £4,000), and have low disposable income (less than £75 per month after essential expenses). During the DRO's 12-month moratorium period, creditors can't chase you for payment. After 12 months, the debts included in the DRO are written off completely. It's a simpler, cheaper alternative to bankruptcy.

How much does a DRO cost?

The application fee for a DRO is £90. This is the only cost — there are no court fees, solicitor fees, or other charges. You can pay in instalments if needed. You must apply through an approved intermediary (usually a debt adviser at a charity like StepChange, Citizens Advice, or National Debtline) — their advice and help with the application is free.

What debts can be included in a DRO?

Most unsecured debts can be included: credit cards, personal loans, overdrafts, catalogue debts, utility arrears, council tax arrears, benefit overpayments, and most other debts where no asset secures the loan. Debts that CANNOT be included are: student loans, child maintenance, criminal fines, confiscation orders, and debts arising from fraud. Secured debts (mortgages, car finance) are not included.

How does a DRO affect my credit score?

A DRO stays on your credit file for 6 years from the date it's approved. During this time, getting credit (including mortgages, loans, and credit cards) will be very difficult. After 6 years, the DRO is removed and won't appear on credit searches. Your credit score will gradually improve, especially if you rebuild credit carefully (e.g. using a credit builder card). A DRO also appears on the Individual Insolvency Register for 15 months.

Debt Relief Order (DRO) Guide — What It Is & How to Apply | PocketWise

A Debt Relief Order (DRO) can write off your debts if you owe less than £30,000 and have low income and few assets. Here’s how it works.

Key Facts

Feature	Detail
Maximum debt	£30,000
Maximum assets	£2,000 (excluding a vehicle worth up to £4,000)
Maximum disposable income	£75/month after essential expenses
Cost	£90 application fee
Duration	12 months (moratorium period)
Outcome	Debts included are written off after 12 months
Credit file impact	6 years
Available in	England, Wales, and Northern Ireland (Scotland has a similar scheme called MAP)

Who Qualifies

Criteria	Requirement
Total qualifying debts	£30,000 or less
Disposable income	£75/month or less (after essential household expenses)
Assets	£2,000 or less (excluding a vehicle worth up to £4,000)
Vehicle	Worth £4,000 or less (included separately from the £2,000 asset limit)
Residency	Live in England, Wales, or Northern Ireland (or have lived/traded there in the last 3 years)
Previous DRO	Not had a DRO in the last 6 years
Not currently in another insolvency	Not bankrupt, in an IVA, or subject to a Debt Relief Restrictions Order
Petitions pending	No pending bankruptcy petitions against you

What Debts Can Be Included

Included	NOT included
Credit card debts	Student loans
Personal loans (unsecured)	Child maintenance
Overdrafts	Criminal fines
Catalogue debts	Confiscation orders
Council tax arrears	Debts from fraud
Utility bill arrears	Social fund crisis loans
Benefit overpayments	Secured debts (mortgage, car finance)
Rent arrears
Payday loans
Buy now pay later
Money owed to friends/family
HMRC debts (tax, NI)

How to Apply

Step	Action
1	Contact a free debt adviser — you cannot apply directly
2	The adviser assesses your eligibility
3	They help you complete the application
4	Pay the £90 fee (can be paid in instalments)
5	Application submitted to the Insolvency Service (Official Receiver)
6	Decision usually within 10 working days
7	If approved, the 12-month moratorium begins immediately

Where to Get Free Advice

Organisation	Contact
StepChange	stepchange.org / 0800 138 1111
Citizens Advice	citizensadvice.org.uk
National Debtline	nationaldebtline.org / 0808 808 4000
PayPlan	payplan.com / 0800 280 2816

What Happens During the 12-Month Moratorium

Effect	Detail
Creditors cannot contact you about included debts	No phone calls, letters, or visits
No interest or charges added	Debts are frozen
No enforcement action	Bailiffs cannot act, no court action
No deductions from wages	Attachment of earnings orders stopped
You must not borrow more than £500 without disclosing DRO	Borrowing restriction
You must not dispose of assets or make preference payments

After 12 Months

Outcome	Detail
Debts written off	All qualifying debts included in the DRO are cancelled — you owe nothing
Credit file	DRO remains for 6 years from start date
Insolvency Register	Listed for 15 months
Can you get credit?	Difficult during the 6-year period, but possible with credit builder products

DRO vs IVA vs Bankruptcy

Feature	DRO	IVA	Bankruptcy
Maximum debt	£30,000	No maximum	No maximum
Cost	£90	~£5,000+ (added to payments)	£680
Duration	12 months	5–6 years	12 months (some restrictions last 3 years)
Monthly payments	£0	Typically £100–£500+/month	May need to make income payments for 3 years
Assets at risk	Low assets only (£2,000 max)	Usually keep your home	Home and valuable assets may be sold
Homeowner	Cannot own property (usually)	Can include property	Property may be sold
Income requirement	Low income (£75/month disposable max)	Must have disposable income	Any income level
Credit file	6 years	6 years	6 years
Public register	Yes (15 months)	Yes (duration of IVA)	Yes (usually 3 months to 3 years)

Restrictions During a DRO

Restriction	Detail
Borrowing	Cannot borrow £500+ without telling the lender about the DRO
Business	Cannot act as company director (unless court gives permission)
Trading name	Must trade under your own name if running a business
Bank account	Some banks may close your account — but basic bank accounts are available
Pension	Pensions are generally not affected
Employment	Most jobs are not affected — but some roles (e.g. accountant, solicitor, financial sector) may have restrictions

What Can Go Wrong

Issue	Detail
Income increases	If your disposable income rises above £75/month during the 12 months, your DRO may be revoked
Assets increase	If you receive assets (e.g. inheritance, compensation) above the limit, notify the Official Receiver
Misleading information	If you provided false information, the DRO can be revoked and you may face a Debt Relief Restrictions Order (lasting up to 15 years)
DRO refused	If you don’t meet the criteria — your debt adviser can discuss alternatives