Debt relief order

Debt relief orders are a non-court based scheme of debt relief aimed at those who have no assets or have a relatively low income.

If you are do not qualify for an Individual voluntary Agreement or a debt management plan because you do not have the available funds at the end of the month to offer your creditors, debt relief orders are designed as an alternative to going down the bankruptcy route and may offer a suitable solution to a debt problem.

To qualify for a debt relief order, you will need to owe £15,000 or less to your creditors, own less than £300 in assets and have £50 per month or less available surplus income.

Debt relief orders are expected to come into force in April 2009 and the process of obtaining an order will be available as an online resource.

Debt relief orders will not be available through the court system; instead they will be available online through authorised intermediary debt advisors.

An Official receiver will make the order and all creditors will be bound by the order which means no further action can be taken against a debtor. Generally any debts included in the order will be discharged at the end of one year.

The advantages over a DRO in contrast to bankruptcy is that a debtors estate is not included in the order, therefore an Official receiver has no legal claim over a debtors property.

Official receivers will not investigate the affairs of a debtor as a part of their normal routine; however, they do reserve the right to revoke a DRO should they find any assets which were not disclosed during the process of the order.

The fee for a DRO will be £90.This in itself is cheaper than applying for bankruptcy. The fee is to cover the cost of the Official receiver and the work undertaken to create the order.

Call our specialist debt team on 08000 915 004 to find out how we could help you.