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.
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