Tuesday 14 April 2009

Debt Relief Orders - Eligibility Criteria

The requirements for a Debt Relief Order are as follows:

* The debtor is unable to pay his/her debts;

* The debtor's total unsecured liabilities must not exceed £15,000;

* The debtor's total gross assets must not exceed £300;

* The debtor's disposable income, following deduction of normal household expenses, must not exceed £50 per month.

* 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.

* The debtor must not have previously been subject to a DRO within the last 6 years.

* The debtor must not be involved in another formal insolvency procedure at the time of application for a DRO, such as:

a) An undischarged bankrupt;

b) A current Individual Voluntary Arrangement;

c) A current Bankruptcy Restrictions Order or Undertaking;

d) A current Debt Relief Restrictions Order or Undertaking;

e) An interim order;

f) 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;

g) 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.

Sunday 12 April 2009

Getting A Debt Relief Order

Debt Relief Orders can only be obtained once you have sought advice from a debt advisor who will undertake a financial analysis. If you meet the necessary criteria and they determine a Debt Relief Order is appropriate for you, then you will be eligible to apply. To do this, you will need the assistance of an approved intermediary who may be your original debt advisor or someone you are subsequently referred to.

An approved intermediary* is a third party who will act as a 'go between' between the person wishing to make an application for a Debt Relief Order and the Official Receiver. The intermediary will help you complete the application form online.


Please Note that you cannot apply for a DRO without the assistance of an approved intermediary.*

To apply for a DRO you will need to pay a non-refundable upfront fee which will typically be in the region of £90.


*An approved intermediary is an individual who has been approved by a competent authority for the purposes of The The Debt Relief Orders (Designation of Competent Authorities) Regulations 2009.

Friday 10 April 2009

Debt Relief Orders UK

What Are Debt Relief Orders?

A new form of debt relief was implemented in the UK this week for those individuals who have little real prospect of paying off their debts in a reasonable time.

Called Debt Relief Orders,* these are a new form of debt relief aimed at helping those who are financially excluded from current UK debt resolution procedures. Debt Relief Orders are targeted at those who have nothing to offer their creditors in terms of income or assets.

The eligibility criteria is rather stringent and it is anticipated that DRO's will be applied for by tens, rather than hundreds of thousands of applicants. Debt Relief Orders will be administered by the Official Receiver.

A DRO will provide relief from debt enforcement and for the discharge of those debts after twelve months.

A non-refundable fee is payable to administer the Debt Relief Order.

Debt Relief Orders (DROs) came into effect on 6 April 2009, in the United Kingdom, as an alternative means to bankruptcy.

*DRO's were introduced in the Tribunals, Courts and Enforcement Act 2007 and appear at section 108 and schedule 17 onwards.

They came into force on 6 April 2009.