What is a DRO?

What is a Debt Relief Order?

Debt Relief Orders are currently only available in England, Wales and Northern Ireland.

If you live outside any of these countries, please use this for interest only and liaise with a local debt relief agency/charity for more specific advice.

I am not a Financial Expert and as such please use this article as information only.

Everything here has come from my own experiences and research, however, nothing beats speaking to the experts.


A Debt Relief Order (DRO) is a way for those with little to no spare income to deal with their debts.

It is a form of insolvency and therefore must be applied for through a qualified DRO Advisor, also called an Approved Intermediary.

If you have up to £20,000 debt, do NOT own your own home and have only a small amount left once the monthly expenses are paid, then a DRO may be an option for you.

A DRO will freeze all payments to any eligible Debt, allowing you to take back control of your finances. After the 12-month term of a DRO, these Debts will be written off.

As always, ensure you gain advice from the experts prior to entering into a DRO.

You can find a local DRO advisor at any Citizens Advice center. You can find your closest one below:

Find your local Citizens Advice center here.


DRO’s do not cover all types of debt. Here is a list of what you can and cannot include in your DRO.

Can include:

  • Credit Card debt
  • Overdrafts
  • Loans
  • Buy now pay later agreements
  • Hire purchase agreements
  • Overpayments of benefits
  • Rent arrears
  • Council Tax arrears
  • Utilities
  • Phone bill

Cannot include:

  • Child support payments
  • Compensation payments for death or injury to others
  • Student Loans
  • Social fund loans
  • Outstanding court fines.


Good Vs Bad

There are many upsides to a DRO, these are listed below:

  • A cost-effective alternative to Bankruptcy
  • You pay nothing towards your debts for 12 months
  • Once the DRO term has finished, your Debt will be written off
  • Creditors cannot pursue you for payment during this time
  • Although a formal debt solution, there is no requirement for you to appear in court


As always, with any Debt Management, there are downsides. These are listed below:

  • Only available to those with less than £20,000 debt
  • Fee of £90
  • Not available to homeowners
  • Will appear on the Insolvency Register which anyone can see
  • Will negatively affect your Credit Score for 6 years


Question mark

Always speak to the experts, they will go through all of the finer points and help you decide if a DRO is a good option for you or not.

A DRO is a big commitment and will affect your Credit Score for 6 years. This will make it very hard to take out any new form of credit within that timeframe so make sure it is the right thing for you.

Here are a few of the criteria so you can get an idea at least.

To be eligible for a DRO, you must:

  • Not own your own home
  • Not owe more than £20,000 (some debts are not included so make sure you check below)
  • Have less than £50 left after household expenses each month
  • Have no more than £1000 worth of assets/savings
  • Not be able to pay your debts
  • Not own a car worth more than £1000 (unless it has been specifically modified for a disability)
  • Not have had a DRO within the last 6 years



The first thing to do is to find a DRO adviser. You can use the link above, or speak to any debt relief Charity/Company.

They will generally have either an in house DRO advisor or will have the contact details for one.

From personal experience, I will always recommend STEPCHANGE, but there are many more out there.

With your DRO Advisor, you will go through all of your finances, in-depth.

If they deem that you are eligible for and that a DRO is the best option for you, then you will move on to the next step.


Contract paperwork

Your DRO Advisor will send you all of the paperwork.

They are always available and will assist you in filling it out, but take your time.

This is obviously a crucial part and may well decide on whether your DRO is approved.

Once the paperwork is complete and your DRO Advisor is happy, you have to pay the £90 fee. This is not for the DRO Advisor, this is paid to the Insolvency Service.

As you are applying for a DRO, it is likely that you may find it hard to find £90, understandably.

If you live in England or Wales then you do have the option to pay this in installments. You DRO Advisor will be able to provide you with more information.


Once your DRO has been approved by the courts then you will be informed. This will include a list of restrictions that you must adhere to for the duration of your DRO. These may include but are not limited to:

  • Not being able to borrow more than £500 without informing the lender about your DRO (Making it very hard to get credit)
  • You cannot act as a Director of a company for the duration of your DRO
  • You may not start, manage or promote a company for the duration of your DRO without informing the Courts
  • You cannot apply for another DRO for a minimum of 6 years

You may find there are additional restrictions on your DRO. These should all be explained to you during the application process.

It is critical that you abide by these restrictions as any breach can end in a criminal prosecution against you.


Once your DRO term has finished, your creditors will be informed and all of your qualifying debt will be written off.

Hold on to all of your DRO paperwork as you may need to produce it in the future.

You will find that your Credit Score has taken a dive. In the grand scheme of things getting your debt sorted is the most important thing, however, getting your Credit Score back on track can be tough.

For a few easy to implement steps, check out my other article on ways to improve your Credit Score.


A DRO is a huge step and a massive commitment so not something to be taken lightly.

Make sure you get advice from the experts and listen to what they have to say, they may be able to provide you with a better alternative.

If you do enter into a DRO, ensure you abide by the restrictions as any breach could see you in court.

Once your DRO is finished, start moving forward with your debt-free life. There are many ways to help improve your Credit, please check out my other articles if you are interested.

As always, look forwards, learn from the experience and enjoy your debt-free life.


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