Am I eligible for a DRO?
If the following situations apply to you then you may be eligible for a DRO:
How do I apply for a DRO?
You cannot apply for a DRO yourself - you must go to a DRO advisor (an approved intermediary) who will help you submit your application. You can ask them any questions, discuss if a DRO is right for you and check your eligibility. Once you have completed the application together your debt advisor will send it to the official receiver.
It costs £90 to apply for a DRO but if this is something you cannot afford, there are charities which offer grants to help you pay this fee.
If your DRO is granted, your official receiver will let you know if you’ve been successful. They will also inform all your creditors that a DRO is in place and that they cannot ask you, or force you, to make any payments to them.
Are there any important declarations I must make to my debt advisor?
Any financial activity two years before your application may influence your DRO application. It is possible that your DRO may be refused if you have:
What kind of debt does a DRO include?
Not all types of debt qualify to be covered by a DRO. A DRO will cover:
You must continue to pay your rent and household bills while you have a DRO. The debts that a DRO will not involve include:
Debt that you build up after the DRO has been issued may lead to abankruptcy order or prosecution if you run up debt without informing your creditor about your DRO.
Although most debts are written off at the end of the DRO period, any debt you have obtained through fraud, you will have to continue paying after the DRO has finished.
Are there any restrictions whilst I have a DRO?
Most of the rules you need to follow whilst under a DRO involve informing your creditor of any changes in your financial situation. You must not:
If your finances recover and you become able to pay back some (or all) of the debt covered by your DRO, your DRO can be revoked. If you break any of the restrictions or do not follow the guidelines set out by your Official Receiver, then your DRO can also be cancelled.
Although these restrictions usually only last the time period for which you have a DRO, they can be extended for up to 15 years in special circumstances. If you are at fault for your financial situation or you have been irresponsible or dishonest about anything to do with your DRO, the restrictions can be extended.
How do I know if a DRO is right for me?
The best thing you can do is discuss it with your authorised debt advisor. Although a DRO can get rid of your debt it can also have a negative impact on your credit score. The DRO stays on your credit profile for 6 years which means you are more likely to berefused credit for important payments in the future such as mortgage payments.
The restrictions can have an impact on your lifestyle, especially if you were involved in managing, directing or promoting a company. It is important to know that if any of your debts were created byhire purchases then you will probably have to give these items back.