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DROs provide debt relief, subject to some restrictions. They are suitable for people who do not own their own home, have little surplus income and assets and less than £15,000 of debt. An order lasts for 12 months. In that time creditors named on the order cannot take any action to recover their money without permission from the court. At the end of the period, if your circumstances have not changed you will be freed from the debts that were included in your order. DROs do not involve the courts. They are run by The Insolvency Service in partnership with skilled debt advisers, called approved intermediaries, who will help you apply to The Insolvency Service for a DRO.
Is a DRO likely to be suitable for me?
To apply for a DRO, you must meet certain conditions:
You must be unable to pay your debts.
You must owe less than £15,000.
You can own a car to the value of £1000 but the total value of other assets must not exceed £300.
After taking away tax, national insurance contributions and normal household expenses, your disposable income must be no more than £50 a month.
You must be domiciled (living) in England or Wales, or at some time in the last 3 years have been living or carrying on business in England or Wales.
You must not have been subject to another DRO within the last 6 years.
You must not be involved in another formal insolvency procedure at the time you apply.
If you still have any queries regarding DROs you can call The Insolvency Service Enquiry Line on 0845 602 9848.
And info from CCCS below.
Quote:
Originally Posted by CCCS_Matthew
Hi all,
This is probably a good opportunity to mention that CCCS are one of the recognised approved intermediaries. If a Debt Relief Order is a suitable solution we will be able to help guide you through the full process of getting it set up.
If you do feel you fit the criteria for a Debt Relief Order, feel free to call us on the helpline on 0800 138 1111 (lines are open Mon-Fri from 8am to 8pm), or alternatively you can use our Debt Remedy facility by following this link here from the 6th of April.
If you would like to ask any questions about Debt Relief Orders, feel free to post on the CCCS thread here.
Just a reminder to look out for those who may benefit from the new debt relief orders ( DRO) coming in to force in April this year. There is info on the net but these are the main practical features;
Total debt must be no more than 15k
Must not be a homeowner ( not even with neg equity)
Assets must be below £300 although a vehicle upto £1000 is always exempt.
Disposable income ( after all reasonable expenses) of £50 or less. ( No provision of IPA's )
ONLY the debts listed will be wriiten off. If a debt comes to light that pushes over the 15k limit then the order will be revoked.
The conditions regarding restrictions on employment, borrowing, trading whilst undischarged are all the same as BR.
Debts that can go in to BR can go in to a DRO.
If applicants financial situation improves within the year then then the order may be revoked or applicant may be asked to contributr towards debts.
No early discharge.
MAIN ADVANTAGES;
There is no involvment of the court.
The cost is £90, and is able to be paid in instalments through payzone and post office outlets.
There is no local newspaper advert or placed in the London Gazette. DRO info is available on insolvency service web site.
You must apply through an intermediary ( CAB, CCCS, NAT DEBTLINE ETC) so advice must have been taken. Intermediary will asist with application, which is on line only. No fee can be charged by any intermediary.
My thoughts;
Are that most will be excluded via the 15k ceiling. Definately not suitable for someone in possession proceedings who may expect mort shortfall. Those applying must be certain about what they owe and who to. (biggest practical problem I think)
Useful for non home owners, with comparatively low debts who struggle to find the £360 + for BR.
What do you think ?
EDIT; If you have a pension ( even just opting out of serps ) with a fund value of over £300 then you cannot have a DRO - which is ridiculous,but true.(unless the pension is already in payment)
MAKE SURE that you apply for your credit report from Experian before you apply for a DRO. If your report says you are over 15k or your personal details are incorrect then your DRO may fail.
think it will be of benefit to some but like you said, it will exclude quite a lot of people because by the time you get to the stage of realising BR is your only option, most peoples debts will be larger than this and you also probably cannot remember to include every single debt.
I was wondering if there would be any new system brought in considering the amount of people who have been going BR.
There's certianly a whole in the 'market' for this DRO. I'm guessing it will be people who have always been on a low income and haven't had the opportunity to mount up higher levels of debts that will benefit, the very same people who are not able to find the £495 fees needed for BR, especially those whose entire income is made up of benefits.
There have certainly been a fair few members here for who this would be a lifeline.
BSC Member No.127
Phew
The Following 2 Users Say Thank You to peachyprice For This Useful Post:Show me >>
When I first heard about this I did think that it would be a good thing and will "help" a lot of people who are in desperate circumstances.
I do worry though, and I am aware about glasshouses and stones, that this may make it easier for people not to worry about being in debt because there is an "easy way out".
I guess it is up to the credit providers to be more vigilant in who they offer credit to and to have sensible credit limits ...... ( speaking from experience ) there is still too much raising of limits and credit being offered, especially by sub prime providers.
IMHO
SA
Things turn out best for people who ....... make the best of the way things turn out.
As Peachy says, this is aimed at those who survive on low incomes, its the cost of BR that forces many in this social group to be at the mercy of DCA for a great length of time, only being able to offer £1 per month, sometimes for years. ( I had one client about 3 months ago that has been paying Nat west a £1 per month since 1983 !!
Yeah true it would not have helped me and with so many having debts in excess of 15k it still makes it hard for those deep in debt to pay the £495 needed to go BR.
I was wondering the other day why they cannot allow you a crises loan to go BR is you met a certain criteria which would obvoiusly have to be paid back but might be easier for them in instalments
K2nga
BSC Member 176 BR 23/06/08 ED 22/01/09 Credit file BR fall off date: 24/06/14
Yeah i agree i have been having to use the CAB alot in fact i am a regular now but they are up to there necks as it is and there are always a people waiting in the waiting rooms for advice.
K2nga
BSC Member 176 BR 23/06/08 ED 22/01/09 Credit file BR fall off date: 24/06/14
The Following User Says Thank You to k2nga For This Useful Post:Show me >>
That sounds like a good idea........ it is going to make the debt charities and CAB very,very busy....
I hope they are going to get help from the government for extra funding.
SA
It is going to make us very busy as you say!! No extra funding is being given except that £10 out of the £90 fee goes to the money advice trust to provide training.
I see there is lots of people going bankrupt with debts under £15,000 not sure if its been mentioned on here, basically in April goverment are looking to introduce a debt relief order that writes off debt upto £15k without a full blown bankruptcy, not sure if some of you can hold off until then!
"Debt Relief Orders should allow people with debts of less than £15,000 and minimal assets or surplus income to write off debts without a full-blown bankruptcy."
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps. Take care over copyright. Use excerpts and links rather than copying long text. This site asserts copyright on all comments posted on the board.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.
Debt Relief Orders
K2nga 
BSC Member No.127 
No extra funding is being given 
except that £10 out of the £90 fee goes to the money advice trust to provide training.
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