Debt Relief Order in UK is another alternative to Bankruptcy

Are you worried about your unsecured debts and have no disposable income to repay them? Well, there is an answer to this. In UK, Debt Relief Order has been in vogue since 6th April, 2009 as an alternative to Bankruptcy.

Debt Relief Order or DRO is a form of insolvency measure to aid those who do not have assets or excess income to pay off their debts. So if you have a debt of less than £15,000 and a gross asset of £300, you can resort to a DRO for getting debt free. Want to know about the eligibility factors for making a DRO application? Take a look:

  • You must be a debtor and your total unsecured liabilities should not be more than £15,000.
  • Your gross assets should not exceed £300.
  • Your disposable monthly income should not exceed £50 after deducting the normal household expenses.
  • You must be domiciled in England or Wales or carrying out business for three years.
  • You must not be subjected to a DRO in the last 6 years.
  • You must not be involved in any other insolvency measures such as IVA, Bankruptcy Restrictions Order or be an undischarged bankrupt.

You need to apply for a DRO online with the aid of an approved intermediary in order to complete the form. Once you complete the form and pay the fee, an Official Receiver will prepare the order. In a DRO there is no involvement of the court.

If your application for a DRO is granted, then your creditors will no longer be able to enforce any legal action against you. DRO applies to those creditors who are included in the application. A DRO helps you to get debt free within a month i.e. 12 months from the order. However, if your financial situation gets better you must ensure to make arrangements to repay your creditors.

Once you are granted a DRO, you will have certain restrictions. Here they are:

  • You cannot obtain a credit £500 or more without informing your lender about your DRO.
  • You cannot carry on a business in a different name after being granted a DRO without telling all those with whom they do business with under the previous name.
  • You cannot be a part of promotion, management or formation of any firm without the court's permission.

You can more details on DRO the Individual Insolvency Register at . The original consultation document entitled 'Relief for the Indebted - An Alternative to Bankruptcy' is available from under the section entitled 'I am interested in insolvency law, policy changes and evaluation and consultation,' then follow the link to the consultation register.

Further questions about the legislation or policy of Debt Relief Orders should be addressed to Sarah O'Sullivan, Senior Policy Advisor, The Insolvency Service, telephone 0207 291 6766 or email to sarah.o'

Questions concerning the Official Receiver's role and the DRO process should in the first instance be addressed to The DRO Unit, The Insolvency Service, telephone 01752 635200 or email to