Debt Relief Order
Debt Arrangement Scheme
Bank Loan Debt
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A debt relief order (DRO) could assist you in regaining control of your finances if you don’t own property, have few assets or spare income, and owe less than £20,000.
This freezes the interest rates on your debts for a year. Once this period finishes, and if your financial situation hasn’t improved, the debts included as part of the DRO will be written off.
As well as the qualifying criteria mentioned above, a debt relief order is only suitable for those who cannot realistically pay their debts, aren’t going through another form of insolvency, and reside in England or Wales.
To apply for a debt relief order, it must be obtained from an authorised person - usually an ‘official receiver’. They will assist you in making the application and charge £90 for their services.
The debt relief order lasts for 12 months. However, if your financial situation improves during this period, it may be cancelled.
This restriction, as well as other requirements, means that debt relief orders are not a suitable solution in all cases.
One possible alternative is an IVA. Although a debt relief order is not the same, they share a few similarities. For example, those on either solution will be added to the insolvency register and creditors are usually unable to take legal action against you in both cases.
However, there are several key differences. For example:
Generally, a debt relief order can be a preferred solution if you cannot afford to make any monthly payments and have limited assets. However, as everyone’s circumstances are different, it’s essential to seek specialist debt advice before committing to one solution.
A debt relief order can be a great way to control your finances – especially if you think your situation won’t improve within the year. However, get in touch today for a no-obligation chat and we’ll help find the best solution for you.
Simply get in touch with our advisors through the contact form or call us today on 0161 956 2680. No matter your situation, we’ll help find you the best possible outcome.
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
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Free money help and advice can be found at the MoneyAdviceService.org.uk