Top five questions about… Debt Relief Orders.
A Debt Relief Order, or a DRO, is a form of insolvency which is bankruptcy for people with debt levels of less than £15000, low surplus and little or no assets. Researching debt solutions can be a daunting task, we have therefore put together five of the most common questions.
How long does a DRO last?
Once you have successfully been granted a DRO a Moratorium is placed upon your unsecured debts. This means that lenders cannot take any action against you. The Moratorium or hold usually lasts for 12 months, after this time you will become discharged from your qualifying debts and will no longer be liable for them.
Do I need to go to court for a DRO?
Unlike the other form of bankruptcy where you need to attend court, with a DRO the process does not require you to. A DRO is approved by the Insolvency Service upon submission from Approved Intermediaries, who work for a Competent Authority such as Payplan.
What debts are included in a DRO?
A DRO will include unsecured debts such as:
- Payday loans
- Credit cards
- Store cards
- Bank loans
Debts that aren’t included are:
- Court fines
- CSA arrears
Will I be able to keep my car?
You are able to keep your car as long as it is valued below £1,000. If you have a car that has been modified due to a disability and you need it to get around day-to-day then you will be able to keep it.
How does a DRO affect my credit rating?
As a DRO is a form of insolvency, a note will therefore remain on your credit file for six years from the date it was approved, meaning that you will find it extremely difficult to obtain any further credit.
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