Debt Relief Orders
A Debt Relief Order is a new type of bankruptcy for individuals with less than £15,000 unsecured debt, less than £300 in assets and with a disposable income of less than £50 per month.
Debt Relief Orders were introduced on 6th April 2009 and are only available in England and Wales. However, the Scottish equivalent is LILA (Low Income Low Asset) Bankruptcy.
What is a Debt Relief Order?
A Debt Relief Order is a new alternative to bankruptcy for people who are unable to afford an IVA, Debt Management Plan, Full & Final Settlement, to refinance or even to petition for their own bankruptcy.
Currently, petitioning for your own bankruptcy costs £495, however the Debt Relief Order will only cost £90 enabling people with little money to enter bankruptcy through an accredited intermediary.
Qualifying for a Debt Relief Order
Your debt must not total more than £15,000. Your assets (property etc) should total no more than £300. Only non-essential items, which can be easily sold, are considered. You should have a disposable income of no more than £50.(We can work out if you qualify). You should not be involved in any other form of insolvency i.e. being a serving bankrupt or in an IVA. You must have resided in England or Wales for at least 3 years. The Debt Relief Order would be granted and all your debts would be cleared were you to meet the criteria above for 12 months. If your circumstances changed during the duration of the Debt Relief Order then you would be expected to start repaying your creditors.
Restrictions of a Debt Relief Order
While in a Debt Relief Order (DRO) you will be subject to a number of
restrictions, including:
Not being able to obtain credit of £500 or more without informing the lender
you are within a Debt Relief Order.
You may not trade (directly or indirectly) in a name that is different from
the name under which you were granted a DRO, without telling all those with
whom your do business, the name under which you were granted a DRO.
You may not be involved (directly or indirectly) with the promotion,
management or formation of a limited company, and may not act as a company
director, without the court's permission.
You can only obtain a Debt Relief Order every 6 years.
Phone or e-mail today to see whether a Debt Relief Order is suitable for
you.