Debt Relief Order - Write-Off Debt up to £15,000
Government Debt Solution and Viable Alternative to Going Bankrupt
Feb 26, 2009
A Citizens Advice Bureau (CAB) report revealed that 58% of clients had no spare money to pay off personal debt. The CAB are currently dealing with a colossal 7,241 new debt problems each day. With rising levels of involuntary unemployment, financial difficulties are set to worsen for millions of people. The introduction of the Debt Relief Order (DRO) couldn't have come at a more opportune time.
What is a Debt Relief Order (DRO)
A Debt Relief Order is a viable alternative to an Individual Voluntary Arrangement (IVA) or going bankrupt. This debt solution is handled by an intermediary, an experienced debt advisor. The intermediary will provide general advice and make sure that the debtor has complied with the Debt Relief Order.
A Debt Relief Order is aimed at assisting those on low incomes that also have minimal assets. For the outlay of just £100, it gives them the chance to become debt free in just 12 months. Once a DRO is in place, no form of creditor harassment in relation to personal debt is permitted.
It is a form of insolvency so will result in a bad credit rating for those opting for this debt solution. However, this is unlikely to affect most people with financial difficulties as the majority already have bad credit. A Debt Relief Order will appear on a centralised government Insolvency Register.
Eligibility for a Debt Relief Order
- The debtor is unable to make payments on outstanding personal debts;
- The debtor’s total unsecured debts must not exceed £15,000;
- The debtor’s total gross assets must not exceed £300;
- The debtor’s disposable income, after household expenses, mustn't exceed £50 per month;
- The debtor shouldn't be: an undischarged bankrupt, subject to a Bankruptcy Restriction Order (BRO) or already in an Individual Voluntary Arrangement (IVA).
Restrictions once the Debt Relief Order is in Place
- The debtor must not obtain credit of £500 or more without disclosing that they are subject to a Debt Relief Order;
- The debtor cannot carry on business in a name different to that when the Debt Relief Order was granted without informing the affected parties;
- The debtor may not be involved with the management or formation of a limited company;
- The debtor may not act as a company director without permission from the court;
- The debtor is only allowed one Debt Relief Order every six years.
A Debt Relief Order is an excellent debt solution for those that meet the necessary criteria. As the debtor doesn't have any disposable income or assets, no payment needs to be made into the arrangement.The debtor will normally be discharged from a DRO after just 12 months.
Those seeking to write-off debt may be interested in finding out whether they have an illegal credit card or unenforceable loan agreement. Individuals that are struggling with serious debt problems may be able to write-off debt with an Individual Voluntary Arrangement, also known as an IVA.
 |
 |
 |
 |
 |
