A Debt Relief Order (DRO) is a formal debt solution available in England, Wales, and Northern Ireland. It provides protection from creditors for 12 months, during which time interest and charges on included debts are usually frozen, and creditors cannot take enforcement action against you. If your financial situation doesn’t improve after 12 months, included debts will usually be written off.
To qualify for a DRO, your total unsecured debt must be less than £50,000, your total assets should be valued at £2,000 or less, and your car must be worth no more than £4,000. Your disposable income (the money left after covering your essential living costs) must also be £75 or less per month.
DROs are often considered a lower-cost alternative to bankruptcy because there’s no application fee and they’re designed for people with low incomes and few assets. However, a DRO will be recorded on the Individual Insolvency Register and your credit file for six years, which can negatively affect your credit score and make it more difficult to access credit.
We're working on new Debt Relief Orders (DROs) guides. In the meantime, explore the Knowledge Hub for more debt advice.
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Bankruptcy
Bankruptcy is a formal debt solution designed to help people in England and Wales who are unable to repay their debts. It can usually write off certain debts, typically after 12 months, if your circumstances don’t improve, but it should be viewed as a last resort due to the potential long-term implications on your finances. Once you’re declared bankrupt, most creditors will be unable to take legal action against you or request payment of any of the included debts.
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Individual Voluntary Arrangements (IVAs)
An Individual Voluntary Arrangement (IVA) is a formal debt solution available in England, Wales, and Northern Ireland. It allows you to repay your debts through manageable monthly instalments over a set period (typically five years). Once approved, interest and charges on included debts are usually frozen, and creditors generally cannot take legal action against you or contact you to request payment. Any remaining debts included in the IVA will typically be written off once you’ve successfully completed the arrangement.
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Debt Management Plans (DMPs)
A Debt Management Plan (DMP) is an informal debt solution available in England, Scotland, Wales, and Northern Ireland. It involves making one monthly payment to a debt management provider, who then distributes the money to your creditors. Your payments are based on what you can afford after you’ve covered your essential living costs, and will last for as long as it takes you to repay the included debts in full.
Could a DRO help you?
Our advisors will explain the pros and cons of each option, including any risks, costs, and impact on your credit file, so you can choose the solution that’s right for you.
