Debt Relief Order UK Guide (DRO Eligibility, Costs, What It Writes Off)

DRO Eligibility Criteria

To qualify for a DRO, you must meet all of the following criteria: Total unsecured debts of £50,000 or less — this includes credit cards, personal loans, overdrafts, payday loans, store cards, rent arrears, council tax arrears, and benefit overpayments. Secured debts (mortgage, car finance) and certain priority debts (child support, court fines, student loans) cannot be included. Assets worth £2,000 or less — you cannot own a home or have significant savings, investments, or valuable possessions. A car worth up to £4,000 is allowed (higher if adapted for disability). Essential household items, tools of trade, and clothing are excluded. Disposable income of £75 per month or less — after deducting essential living costs (rent, food, utilities, travel), you must have £75 or less spare each month. Lived in England or Wales in the last 3 years (or been ordinarily resident). Not been in a DRO in the last 6 years. Not currently bankrupt or in an IVA. An approved intermediary — usually a debt advisor from a charity (StepChange, Citizens Advice, National Debtline) — must apply on your behalf. You cannot apply directly. The intermediary assesses your eligibility and submits the application to the Insolvency Service.

DRO Costs and Process

The DRO application fee is £90, which can be paid in instalments to the Insolvency Service. If you are on certain benefits or a low income, you may get help with the fee from a debt advice charity. The process: Step 1 — see a qualified debt advisor (intermediary) who reviews your finances and confirms you meet the criteria. Step 2 — the intermediary submits the DRO application online to the Insolvency Service. Step 3 — the Insolvency Service reviews and approves the DRO (usually within 1–2 weeks). Step 4 — a 12-month moratorium period begins. During this time, listed creditors cannot take any enforcement action — no court action, no bailiffs, no contact demanding payment. You do not make any payments toward the listed debts. Step 5 — after 12 months, the debts are discharged (written off) provided your circumstances have not changed. If your income or assets increase significantly during the 12-month period, the DRO may be revoked. The DRO is recorded on the Individual Insolvency Register and on your credit file for 6 years.

What Debts Are Included and Excluded

Most unsecured debts can be included in a DRO: credit cards and store cards, personal loans, overdrafts, payday loans, catalogue debts, rent arrears (up to £50,000), council tax arrears, gas and electricity bill arrears, water bill arrears, benefit overpayments, and HMRC debts (income tax, VAT) if they are less than 12 months old. Debts that cannot be included: secured debts (mortgage, secured loans, car finance on hire purchase), child support arrears, court fines (including magistrates court fines), student loans (from SLC), personal injury compensation orders, debts incurred through fraud, TV licence fines, and certain social fund loans. If you have a mix of included and excluded debts, you must continue paying the excluded ones during the DRO period. The DRO only covers the specific debts listed in the application — any debts incurred after the DRO is granted cannot be included. Check with your intermediary which of your specific debts qualify.

Impact on Credit File and Employment

A DRO appears on your credit file for 6 years from the date of the order. During this time, it is very difficult to obtain credit — most lenders will reject applications. If you do manage to get credit, it will be at very high interest rates. The DRO is also listed on the Individual Insolvency Register, which is a public record searchable by anyone. This can affect employment — some professions (accountancy, law, financial services) require disclosure of insolvency. Check your employment contract. If you work in financial services regulated by the FCA, you may need to notify your employer. If you rent, your landlord may have a clause about insolvency in your tenancy agreement. During the 12-month DRO period, you cannot act as a company director without court permission, and you cannot manage a business without disclosing the DRO. After the 12 months, these restrictions end (unlike bankruptcy, which has longer restrictions on being a director in some cases). After 6 years, the DRO is removed from your credit file. Start rebuilding your credit with a credit-builder card and electoral roll registration.

DRO vs IVA vs Bankruptcy

DROs are the least expensive formal debt solution but have the strictest eligibility criteria. DRO vs IVA — IVAs require monthly payments for 5–6 years and cost £6,000–£10,000 in fees. DROs cost £90 and involve no payments. IVAs are for debts over £10,000; DROs are for debts under £50,000. DROs require you to have under £75/month disposable income; IVAs work best when you have surplus income. DRO vs Bankruptcy — bankruptcy costs £680–£1,300 and may involve selling assets (including your home). DROs cost £90 and protect assets up to £2,000. Bankruptcy lasts 12 months on paper but can have longer restrictions on directorships. Both appear on the Individual Insolvency Register for similar periods. DROs are less stigmatised but offer less flexibility — you cannot own a home or significant assets. When a DRO is unsuitable — if your debts exceed £50,000, if you own a home, if you have more than £2,000 in assets (excluding car), or if your disposable income exceeds £75/month, you should consider an IVA, DMP, or bankruptcy. Get free advice from StepChange before deciding.

FAQs

What happens after DRO 12 months?

After 12 months, the DRO ends and the listed debts are written off (discharged). The DRO remains on your credit file for 6 years from the date of the order. Creditors cannot pursue you for the included debts after the moratorium ends.

Can I get a DRO if I own a car?

Yes, if the car is worth £4,000 or less. If your car is worth more, you may still qualify if you need it for work or have a disability. The intermediary will assess whether the car is considered an essential asset.

Does a DRO stop bailiffs?

Yes. While a DRO is in effect, creditors included in the DRO cannot take enforcement action, including bailiff visits. If bailiffs have already taken goods, they must be returned (except for certain seized goods).

Can I apply for a DRO on my own?

No. You must apply through an approved intermediary — a qualified debt advisor from a charity service like StepChange, Citizens Advice, or National Debtline. This ensures you get professional advice and understand the consequences.

Will a DRO affect my partner?

Not directly — a DRO is individual. However, if you have joint debts with a partner, they remain fully liable for the debt after your DRO. The creditor can pursue your partner for the full amount. Joint assets (like a joint bank account) may be affected.