Burdened by Debt? A Debt Relief Order Could Be Your Debt Solution

Burdened by Debt? A Debt Relief Order Could Be Your Debt Solution

Feeling overwhelmed by debt can be really stressful. The constant calls from creditors, bills stacking up, and the ongoing worry about finances can take a toll. But you don’t have to go through this tough time by yourself. Consider a Debt Relief Order (DRO) as a way to find some relief in your financial situation.

How does a Debt Relief Order (DRO) benefit me?

It offers a payment-free period, legal protection from creditors, and potential automatic debt write-off.

Latest News on Debt Relief Orders (DRO)

Since writing this post there have been some important updates made to DROs

What is a Debt Relief Order (DRO)?

A DRO is a legal solution available in England, Wales, and Northern Ireland that gives you a break from most unsecured debts for 12 months. During this time:

• No Payments: You don’t have to make any payments to your creditors, giving you a chance to catch your breath and sort out your finances.
• Legal Protection: Creditors can’t take legal action against you, like court proceedings or bailiff visits. It provides a period of peace of mind.
• Debt Relief: If your financial situation hasn’t significantly improved after 12 months, most of the debts covered by the DRO will be automatically written off. You won’t have to pay them anymore.

Who Qualifies for a DRO?

To be eligible for a DRO, you need to meet specific criteria:

• Total Debts Under £30,000: Your unsecured debts, such as credit cards or loans, must be less than £30,000.
• Limited Assets: You should own less than £1,000 in assets (things you can sell for money).
• No Recent Insolvency: You haven’t applied for a DRO or declared bankruptcy in the past 6 years.
• UK Residency: You must be living in England, Wales, or Northern Ireland.

Debt Relief Order Eligibility Flow Chart

This free debt information DRO flow chart can be used to assist you in deciding whether or not a DRO is right for you. Like all information on Johnny Debt, we always advise that you search far and wide when seeking the right debt solution for you.

Applying for a DRO:

You can’t apply for a DRO directly. You have to go through an approved intermediary, like a debt advice charity or Citizens Advice. They will assist you in completing the application and checking your eligibility. There’s a £90 fee for the application.

Important Things to Know:

• A DRO will be on your credit record for 6 years, which might affect your ability to borrow money in the future.
• Some debts are not covered by a DRO, such as student loans, child maintenance, and secured debts (like mortgages).
• You can’t get another DRO or declare bankruptcy while one is in effect.

Alternatives to a DRO:

Before going for a DRO, explore other options that might suit your situation better, like:

• Debt Management Plan (DMP): You make affordable monthly payments to your creditors.
• Individual Voluntary Arrangement (IVA): A formal agreement with creditors to repay a portion of your debt over a fixed period.
• Bankruptcy: A more serious option involving selling assets to pay off debts.

Where to Get Help:

If you’re struggling with debt, at Johnny Debt we would advise that you search further than just this site. We would recommend that when searching Google for debt issues, search beyond page three! Perhaps call into your local Citizens Advice and discuss your unique debt situation. Also, search for online forums and groups, where you can ask specific questions.

Remember, you don’t have to face debt alone. Seeking professional debt advice can guide you toward the best solution for your financial situation. With the right steps and support, you can navigate through tough times and reach a more stable financial position.

Need Time to Think About Your Final Debt Solution?

If you feel as though you are being rushed into making a debt solution, then why not consider a 2 step approach to tackling your debts? This approach will give you time to think and confidently decide on what final debt solution is best for you.