What is a Debt Relief Order?

If you owe less than £30,000, a Debt Relief Order could be an effective way to regain control of your finances. You could qualify so long as you don't own your own home, or any other assets, and don't have the income required to repay your debt independently.

How does a Debt Relief Order work?

A Debt Relief Order can be used to clear qualifying debts such as credit cards, loans, overdrafts, rent, benefit payments, and in-store credit agreements. To initiate a Debt Relief Order, you need to apply through an intermediary. This person will eventually act on your behalf when it comes to financial matters.

It will cost you £90 to make an application for a Debt Relief Order. This fee can be paid in instalments over six months, but the order will not be considered unless it is paid off in full.

If you are eligible, your Debt Relief Order will be granted and - from that point onwards - you will not have to make any further payments to your creditors. Your debt will be frozen for a year, after which your circumstances will be re-examined. If nothing has changed and you are still not in a position to pay, your debt will be written off. We can't help you set up a debt relief order, but we can still detail everything you need to know.

Do I qualify?

The most important qualifications to bear in mind when considering this solution are:

  • Your combined debts are worth less than £30,000.
  • You do not own a home or any other assets.

Ultimately, you need to be in a position where it is unlikely that you would find a way to pay off your debt without help. The qualifying criteria state that any assets or savings that you own should total less than £2,000 and your disposable income - once all essential living costs are deducted - should be less than £75.

You also can't be legally bankrupt or in a position where your creditors have applied to make you so. Furthermore, you should not have an existing IVA or be in the process of applying for one. You must not have held a Debt Relief Order in the last six years.

If you meet this criteria, it could be worth applying for a Debt Relief Order to give you the breathing space that you might well need.


A DRO can be used to clear qualifying debts such as credit cards, loans, overdrafts, rent, benefit payments, and in-store credit agreements

Can a Debt Relief Order be refused?

A Debt Relief Order can be refused but generally this is only when you don’t meet the qualifying criteria. If you can't provide further information when asked, or if the official receiver believes you might not have been completely honest in your application, it may also be rendered void.

You should always speak to an adviser before you make the application. That way you will know for sure if you qualify and what information you need to be prepared to share. You can appeal the decision made by the official receiver but it would be up to you to show how their original decision was incorrect.


One obvious advantage of a Debt Relief Order is that it can give you the breathing space you need to get your life back on track. You would also be protected from any legal enforcement by your creditors and will not have to go to court. You will also have your debts completely written off after a year if your situation does not improve.


A Debt Relief Order might seem too good to be true to those suffering from large debt and that's because, realistically, there are some disadvantages. Firstly, you might need to close your existing bank account and open a new one. This is likely to cause disruption and you might lose certain privileges with your existing bank.

Any goods that you have on hire purchase will probably need to be returned too. Your tenancy agreement might well be affected, putting your living situation into a precarious position (your debt relief advisor should be able to check this on your behalf). The fact that you will have had a Debt Relief Order will also be visible on your credit report for a six-year-period, which might make it difficult for you to secure credit in the future.

There are also certain rules that you will need to follow during the Debt Relief Order period. Firstly, you will not be able to borrow £500 or more without telling the creditor about your Debt Relief Order. You can also not be involved in setting up a limited company without first getting permission from the courts. This includes becoming a company director.

If you have a business operating under a different name to the one you used in the application for your Debt Relief Order, you will also need to advise everyone - that you do business with - of your financial position. These rules can be difficult to live by, but if a Debt Relief Order is your only way out it could well be worth it.

Is a Debt Relief Order right for me?

Before proceeding with a Debt Relief Order, you should determine whether this solution is right for you. At MoneyFixers, our experts are skilled and ready to examine your circumstances. They might also identify that another solution, such as an IVA, is better suited to your needs. Contact us today and we’ll be happy to help you on the path to financial freedom.