Fraser Frayne Insolvency Practitioners Limited
Old Canal Cottage
Bath BA2 8BS
Tel/Fax: 01761 437754
DEBT RELIEF ORDERS
A Debt Relief Order (DRO) is a Court-ordered procedure which is designed to help people who have relatively low debt, little surplus income and few valuable assets and who have no realistic chance of paying off their debts within a reasonable time. The DRO Service is run by the Official Receiver as part of the Insolvency Service.
The basic rules:
DRO's don't involve the courts, and are run by The Insolvency Service in partnership with debt advisers known as 'Approved Intermediaries', who actually help individuals apply to the Insolvency Service for a DRO (typically, the Citizens’ Advice Bureaux)
The Insolvency Service website (www.insolvency.gov.uk) states that a Debt Relief Order is suitable for people who:
Would a Debt Relief Order write off all the Debtor’s debts?
Some debts cannot be included in a DRO, such as:
Secured debts are unlikely to be an issue anyway, as owning property would probably mean a Debtor would not be eligible for a Debt Relief Order, as his or her assets would almost certainly be worth more than £300.
Does a Debt Relief Order come with any restrictions?
Yes, the restrictions are similar to the restrictions a Debtor would face if he was declared bankrupt. For example, the Debtor would not be able to obtain credit of £500 or more without declaring that he was subject to a DRO.
We can not offer this service, but we will be willing to advise you to see if you qualify and assist you in dealing with the local Citizens’ Advice Bureau.
This outline is general and may not apply to a specific Debtor’s circumstances for which a DRO may not be appropriate. The outline, views and suggestions set out are not intended to constitute professional advice, nor to be a substitute for specific advice.
Registered in England Co. No. 6934426 VAT No. 972 6786 64
Registered Office: Old Canal Cottage Dunkerton Bath N E Somerset BA2 8BS
Company Secretary: Fraser Watt; Director: Matthew Frayne BA, FIPA, FABRP
Licensed Insolvency Practitioner licensed by the Insolvency Practitioners Association
Valiant House 4-10 Heneage Lane London EC3A 5DQ
© 2009 Fraser Frayne Insolvency Practitioners Limited
A DRO will last for 12 months;
During which time, any creditor named on the Order cannot take any action to recover their money unless they have the Court's permission, and
During which, the individual will be freed of the debts included in the Order (unless their circumstances have significantly improved).
Do not own their own home;
Are unable to pay their debts;
Owe no more than £15,000 in total including secured creditors;
Have the total value of their assets not exceeding £300 - although they can own a car worth up to £1,000;
A disposable income (after tax, national insurance contributions and normal household expenses) not exceeding £50 per month;
Live in England or Wales, or have lived, or carried out business in England Wales at some time in the last three years.
Have not been subject to another Debt Relief Order in the previous six years.
Are not involved in another formal insolvency procedure at the time they apply.
Magistrates' court fines,
Secured debts (debt secured against property)