DRO’s are an alternative to Bankruptcy.
If you owe less than £50,000 with little or no surplus income and little or no assets, a DRO can be a cost-effective way of escaping the stress and burden of debt.
To be eligible for a DRO the debtor:
- Must be unable to pay their debts.
- Have total liabilities (not including unliquidated or excluded debts) not exceeding £50,000. Secured debts do not qualify but count towards the £50,000 limit.
- Have gross assets not exceeding £2,000 as determined by resale value. Household bedding, furniture, tools and motor vehicles worth less than £2,000 are excluded. Total allowable asset value is £2,000 plus vehicle value of up to £4,000.
- You do not have sufficient surplus money each month to enable you to make debt repayments.
- Must be domiciled in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales.
- Must not have had a DRO approved within the last 6 years.
- Must not be involved in any other formal insolvency procedure at the time of application for a DRO such as: an undischarged bankruptcy order, a current Individual Voluntary Arrangement, a current Bankruptcy Restrictions Order or Bankruptcy Restrictions Undertaking, a current Debt Relief Restrictions Order or Debt Relief Restrictions Undertaking, an Interim Order.
The Insolvency Service have produced a guide in respect of Debt Relief Order’s.
For more information as to whether a DRO is right for you, contact our experts for confidential advice.
