A debt relief order is often known as DRO, it is a one kind of way to clear all your debts. This is generally suitable for people with a comparatively low level of debt, & comparatively few properties as well as assets. (i.e. valuable belongings of value like a house or car). If a debt relief order is the right choice for you, this might be a simpler as well as a cheaper option to bankruptcy.
And , if you are successful in the application, a debt relief order means you won’t need to pay back certain debts. But, at the end of the debt relief order period (generally 1 year), any debts involved within the debt relief order will be discharged so you won’t need to repay them at all.
In order to be eligible you should meet all the below mentioned criteria:
- The debts are not more than 20,000 pounds
- you have not had a debt relief order in the last six years
- you have worked or stayed in UK for last 3 years
- you aren’t a homeowner
- you have restricted spare money ( not more than 50 pounds to spend every month, after national insurance, tax, & all the household expenses)
- your properties are worth no more than 1000 pounds total!
So, if you are currently in the middle of bankruptcy, an Individual Voluntary Arrangement, or any other formal insolvency-oriented procedure, you won’t be able to opt for the debt relief order. However, if one of your creditors has put in a court request for making you bankrupt, then you can ask for the permission in order to apply for a debt relief order instead.
How to apply for a DRO?
In order to apply for a debt relief order, you will be required to find a reliable as well as licensed debt adviser, also known as an ‘approved intermediary’ – you cannot apply on your own. It costs a minimum amount to apply for a DRO; however, there are some debt charities that might help you to pay this.
Your hired debt adviser can help you finish the debt relief order application form & define the process for you. Then they’ll check each and every detail of your personal situation to assure you meet all the qualifying criteria. And when they have validated the application, the debt relief order can be easily applied for within a few hours.
How long does a Debt Relief Order take to process?
When a Debt Relief Order application is settled, this will take one year to process. And during this period, you will be in the ‘moratorium’ period – it means you will need to stick to some limitations, however it also means that creditors involved under the Debt Relief Order should not chase you during this time.
What can be included in a Debt Relief Order in the UK?
Well, ‘Qualifying debts’ which can go into a DRO involve:
- overdrafts, credit cards,& loans
- benefits overpayments
- purchase now pay later process
- business debts
- Utility bills, arrears on rent, telephone bills, income tax, & council tax.
That’s all about How to Apply for DRO in the UK. Thanks for reading our blog. To know more,, reach us at your convenience!!!