Debt Relief Orders (DROs) – everything you wanted to know but were afraid to ask

posted by in Budgeting

20130131_144002Statistics released today revealed that the number of people applying for DROs is higher than bankruptcy. Even though they’re increasing in popularity they’re still not as well-known as their insolvency brothers, IVA and bankruptcy.

What is a DRO?

DROs are often referred to as a form of “mini bankruptcy”, which isn’t too far from the truth. Like bankruptcy, it’s a way to get debts written off through the court system when you can’t afford to pay them back.

DROs are only available in England, Wales and Northern Ireland. Go to our debt advice in Scotland page to find out about debt solutions available if you live there.

If you meet the criteria then you’ll be placed into a 12 month ‘moratorium period’ (a fancy way of saying ‘waiting time’). During this year your debts will still exist but the courts will notify your creditors of the DRO, so you’ll not have to make payments to your creditors and they won’t be pestering you with letters and phone calls.

If your situation hasn’t improved by the end of the 12-month period you’ll be discharged from the DRO (a fancy way of saying that it’s ended) and your debts are written off.

What are the criteria?

To apply for a DRO you need to meet the following criteria:

  • You have to have under £50 per month available after paying essential living costs
  • You must have under £1000 in personal assets (not including your car)
  • If you have a car if must be worth £1000 or less
  • Your debts must be under £20,000
  • You must reside in England, Wales or Northern Ireland, or have carried out business in these countries in the last three years

How do I know if I’ve under a £50 a month spare?

We can help you work this out! If you contact us for advice we’ll plan a monthly income and expenditure budget which will show what you’ve got coming in and what you need to live off (not including debt payments or luxuries). By taking your outgoings away from your incomings we’ll know what’s left.

What’s classed as an asset in a DRO?

Basically as asset is something that you own that could be sold to raise money. It doesn’t include day-to-day things like clothes or furniture. It’s more things that are worth a bit, so if you’ve got a brand new 60-inch LED TV then you might not qualify for a DRO.

What debts are included?

Credit cards, overdrafts, loans and any other kind of unsecured credit debts are included in a DRO – the kind of stuff folk most expect. However it’s often a surprise to people that arrears on household bills, benefit overpayments and items bought on finance are also included.

What about the fees?

The fee for a DRO is £90 and is paid just before your application is submitted to the Insolvency Service. If you apply for your DRO through us we’ll send you a letter with a barcode on, which can be used to load up payments at local shops with PayZone facilities.

You can pay the £90 in instalments but will only be able to apply for your DRO once your payments add up to the total amount.

Who can help me apply?

We can! We’re an ‘approved intermediary’ for DROs. We can put together an application with you and submit it to the Insolvency Service on your behalf.

Before doing any of this we’ll want to make sure a DRO is right for you, so we’ll look at your finances and advise you on all the options. So if you’re interested in a DRO get in touch with us. You can do this online using our advice tool Debt Remedy or by giving us a call.

What happens if my situation changes?

If your finances change during a DRO notify the Insolvency Service and your situation will be reassessed. If you still meet the criteria your DRO will carry on; if you’ve had an improvement in your finances that means you don’t meet the criteria then your DRO will end and you’ll be back to paying your debts (but bear in mind that you should be better placed to deal with the debts).

 Will it affect my credit rating?

It’s a big “yes” for this one. As with bankruptcy a DRO will make your credit rating pretty rubbish for six years. So even after your DRO has been discharged it’ll still be hard to get credit. However most people who’ve got to the point of doing a DRO aren’t interested in ever getting credit again anyway!

At StepChange Debt Charity we want you to be free of debt and save money.

Written by

Tags Budgeting
  • AmyLou

    have applied for a DRO but I owe money to a family member. I have included this on there. What happens with this? Is it written off? Or do I have to pay it? Or do the insolvency pay it thanks

  • Louise

    I’ve got a DRO and it was discharged in 2014, does that mean in 2020 my default debts that are currently on there will disappear along with the DRO? My score is really low due to these monthly defaults although it’s written in my DRO. thanks

    • moneyaware

      Hi Louise,

      Thanks for posting.

      Most things appear on your credit file for six years before dropping off. This means it’s possible that some debts may drop off your credit file before the DRO does.

      I hope this helps,


  • Mario

    I’m considering entering a DRO as am currently majorly struggling with my finances. My outgoings are greater than my monthly wage. I have been advised that a DRO is possible but can take 6-8 weeks to process. My issue is I am borrowing money every month to get me through, if I take out another credit card to see me through to the DRO is processed (6-8weeks) will this have an adverse effect on my application?

    • moneyaware

      Hi Mario,

      In this situation, it’s really important to speak to someone who can offer more advice, as every situation is different.

      You might already be aware that to be offered a DRO you need to contact a registered intermediary (such as StepChange Debt Charity) to get advice and support. We can also answer any questions you have about this.

      If you haven’t yet had advice, please feel free to get in touch with us at and we’ll be able to help.

      Kind regards


  • Gemma Mckeown

    hi i had a dro 4 years ago and many of my debts are still appearing on my credit file as defaulted but i though they had to appear as settled or not show on it at all can someone help me as really trying to improve my credit but cant while they are all there as defaults, thanks

  • Lisa B

    Hi there,

    I would be very grateful for some advice please.

    I am an Irish girl who has been living in the UK for 11 years but now owe debts of just under £20,000. I have bi polar disorder and had a relapse recently and was admitted to hospital. I have been struggling to pay off my debts since i went back to work, but on a part time basis after my son was born and had agreements with some of my creditors for reduced payments but kept paying a couple of others in full including my phone bill. I am not sure why but this is what I chose to do when I was in a panic. I was also suffering from post natal depression at the time.

    My partner and I have been having relationship difficulties and due to my ill health I have handed in my notice at work and have decided to move home to Ireland with my son to try to get well and hopefully get my life back on track.

    I spoke to Citizens Advice a few weeks ago who told me that, in order to apply for a DRO they would need a record of joint incomes into the home but we have given in notice of our flat now and my partner(ex i fear) has decided to live with his parents for the last 2 months of our lease, but he will still pay his share of the bills etc. So I don’t know how looking at (preparing)a budget is going to work, seeing as it is going to change completely in 7 weeks and I will be in Ireland then and not have any income to pay any UK debts. My parents are happy to take care of my son and I because of my ill health but will not be able to afford to pay my debts.

    My question is, I have 2 month’s pay left from work before I leave, where I will have more than £50 after bills but I need this money to make the move home with my son. Will I qualify for a DRO? I move home at the end of May.

    I would be so grateful for any help or advice you might have. I understand that this is a very complicated case and that I also do not have much time left before I move.

    Many thanks


    • moneyaware

      Hello Lisa,

      Thanks for your comment.

      We’d recommend that you get in touch with us for free debt advice, especially if you’re experiencing mental health issues and need some support.

      Because you’re about to experience a change in circumstances we may only be able to offer you what we call ‘interim’ advice (which is temporary) from our England and Wales team but hopefully we can put your mind at ease:

      However, once you move over to Ireland you can then get longer term debt advice and we may be able to offer you a debt solution:

      In the meantime, give us a call and we will help you look at your situation in detail. Gather up your current income, outgoings and debts and get in touch with us.

      I hope this is helpful,

  • Desmond Kerr

    I have got into debt through gambling…… If I use my bank statements as proof of income…… will all the gambling on statement go against me? Or will they just look at income?

    • Desmond Kerr

      I had previously tried dmp….but couldn’t afford, and have a few recent debts now.

      • moneyaware

        Hello Desmond

        Thanks for your comment. We can’t advise on individual cases, so it’s best you give us a call for debt advice that’s tailored to you.

        Get together all of your income and expenditure details, as well as details of your debts and give us a call on 0800 138 1111.
        You can read more information here about addictions and debt:

        We’re here to help, and will do everything we can to support you.