Debt Relief Orders

Debt Relief Orders

If you’re struggling with debt, have few assets, and little to no spare income, a Debt Relief Order (DRO) could help you make a fresh start. It’s a formal, government-backed debt solution that gives you 12 months of legal protection from creditors. After that period, most debts included in your DRO are written off**, giving you a clean slate.

However, a DRO isn’t available if you’re a homeowner or your debts exceed £50,000. In that case, other solutions such as an Individual Voluntary Arrangement (IVA) or Bankruptcy may a more suitable long-term solution.

At NDH Financial, we’re personal insolvency specialists with over 15 years’ experience helping people find the right way out of debt.

What Debts Can Be Included In A DRO?

A Debt Relief Order can include most types of unsecured debts. These are the debts that cause the most day-to-day pressure when you can’t afford to keep up with payments.

Debts You CAN Include

Debts You CANNOT Include

  • Court fines and magistrate fines
  • Child maintenance arrears
  • Student loans
  • Secured loans (like car finance or mortgages)
  • TV licence arrears
  • Compensation orders

These excluded debts will still need to be paid separately, even while your DRO is in place.

Is Getting A Debt Relief Order Right For You?
Or Could An IVA Be Better?

A Debt Relief Order can help if you have a low income, few assets, and rent your home, but it’s only available in specific circumstances. If you own your home, have large debts, or have a disposable income more than £75, an Individual Voluntary Arrangement (IVA) could be a more suitable way to deal with your debts.

An IVA is a formal agreement between you and your creditors, arranged and managed by a licensed Insolvency Practitioner. It gives you legal protection, freezes interest, and writes off remaining qualifying unsecured debts once complete**.

You could qualify for an IVA if you:

  • Have unsecured debts of £7,000 or more
  • Receive a steady income from work (including being self-employed) or a pension
  • Can make a regular monthly payment
  • Owe money to at least two creditors
  • Want a legally protected plan to clear your debts and move forward**
Check if You Qualify
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How Does A Debt Relief Order Work?

When you apply for a DRO, you’re applying for a formal debt solution managed by The Official Receiver, who is part of the Insolvency Service. Once it is approved, it lasts for 12 months - this period is called a ‘moratorium’. During that time, creditors listed in the DRO won’t be able to chase you for payment, add interest and charges, or take enforcement action like using a debt collector or bailiff.

You won’t make payments towards the debts during the moratorium. If your financial situation doesn’t change by the end of it, those debts are written off, and you won’t have to pay them again.

To get a Debt Relief Order, your DRO application must be made through someone called an ‘approved intermediary’, which is usually a regulated debt advisor - this could be a licensed adviser from a registered debt charity or an FCA regulated firm. They’ll assess your situation, check the details, and submit the application form to the Official Receiver on your behalf.

Who Is Eligible For A Debt Relief Order?

The Insolvency Service decides Debt Relief Order eligibility. You may qualify for a DRO if you:

  • Owe less than £50,000 in total debt
  • Have savings or assets worth no more than £2,000 in total
  • Have a car worth under £4,000
  • Have little or no money left each month after essential living costs
  • Live or worked in England or Wales in the last three years
  • Are not a homeowner
  • Are not currently bankrupt, have an interim order or an IVA
  • Haven’t had a DRO approved in the last six years

If you are a Director of a limited company, you will not be able to continue being a Director once the DRO is in force, unless you apply to court.

Not sure if you should apply for a Debt Relief Order?

Although IVAs are what we specialise in at NDH Financial, we understand they’re not right for everyone.

Our licensed Insolvency Practitioner and UK-based IVA Consultants can review your full situation and explain your options clearly, whether that’s a DRO, IVA, or another way to get back in control of your finances.

Book a No Obligation Consultation

Can A Debt Relief Order Stop Bailiffs?

Once your DRO is approved, your creditors are bound by law to follow the debt relief restrictions set out in the order.

This means they must stop contacting you, pause interest and charges, and can’t take any further action like using bailiff to recover the debts included in your DRO.

If one of your creditors continues to contact you after this, your approved intermediary can step in to remind them of their legal obligations.

You don’t need each creditor to agree individually. The protection applies automatically to all the debts listed in it.

When your DRO ends after 12 months, those debts are written off, and your creditors can’t chase you for payment.

Debt Relief Order Pros And Cons

Pros Cons
Debts are written off after 12 months if your situation doesn’t improve Not available to homeowners or anyone with a car worth more than £4,000 or other assets worth over £2,000
Creditors can’t contact you or take legal action once your DRO is approved Affects your credit score and appears on your credit report for six years
Interest and charges are frozen while the DRO is in place You must follow certain restrictions during the 12-month period
No monthly repayments and now free to apply in England and Wales If your income improves, your DRO could be cancelled and debts reinstated
It’s a simpler alternative to bankruptcy for people with low income and few assets Your DRO will be listed on the Individual Insolvency Register for the duration plus three months

Debt Relief Order Restrictions

When a Debt Relief Order (DRO) is approved, certain restrictions apply for the full 12 months. These rules are designed to stop you from taking on more debt or managing money in a way that could affect your creditors.

During this period, you:

  • Can’t borrow more than £500 without telling the lender you’re in a DRO
  • Can’t act as a company director without court permission
  • Can’t manage or promote a company without approval
  • Can’t apply for another DRO or other insolvency solution at the same time
  • Must co-operate with the Official Receiver if asked for information

These DRO restrictions will end automatically after 12 months, unless the Insolvency Service extends them because of dishonest behaviour.

If your situation improves, for example, your income goes up or you gain new assets, your DRO may be cancelled, and your debts reinstated.

For some people, especially homeowners or those with higher incomes, an Individual Voluntary Arrangement (IVA) can be a better long-term alternative that allows debt repayment while keeping legal protection in place.

Would An IVA Work Better For You?

Many people who look into a Debt Relief Order (DRO) find that an Individual Voluntary Arrangement (IVA) can be a suitable option, especially if they have a higher income or own their home.

An IVA is a legally binding agreement between you and your creditors that can help you clear your debts in a structured way while keeping legal protection in place.

An IVA offers:

  • Legal protection from creditors
  • Interest and charges frozen immediately
  • A fixed 5-6 year term, after which the remaining qualifying debt is written off**
  • Only 75% of creditors need to agree
  • One affordable monthly payment
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What Is The Difference Between An IVA & A DRO?

What Is An IVA?

An Individual Voluntary Arrangement (IVA) is a legal agreement between you and your creditors. It lets you pay back what you can afford each month, usually over five to six years.

During this time, your creditors can’t contact you or take legal action, and interest and charges are frozen. When the IVA ends, any remaining unsecured debts are written off.

Debt Relief Order (DRO) Individual Voluntary Arrangement (IVA)
Legal Status Formal, insolvency process managed through Official Receiver Formal, legally binding agreement
Creditor protection Creditors can’t contact you or take action once approved Full legal protection from all creditors and bailiffs
Interest & charges Frozen for 12 months Frozen for the duration of the IVA
Duration Lasts for 12 months Usually 5-6 years
Debt write-off Included debts written off after 12 months** Remaining unsecured debt written off at the end of the IVA**
Creditor approval None, application approved by Official Receiver Requires approval from creditors holding 75% of the debt value
Legal action risk Creditors can’t take action during the 12-month DRO period Creditors can’t take legal action once an IVA is approved
Minimum debt Up to £50,000 limit Usually £7,000 or more, but can exceed £50,000
Supervision Managed by the Official Receiver Supervised by a licensed Insolvency Practitioner
End result Included debts written off after 12 months if conditions are met Debt-free after fixed repayments and remaining debt written off**

Apply Today

If your debts feel overwhelming, contact NDH Financial for no-obligation, confidential advice.

We’ll look at your situation and explain the suitable solutions for you.

Call us on 0800 0029051 or apply below.

Apply Now

An IVA may not be suitable in all circumstances.  Fees apply. Your credit rating may be affected

Apply now for Individual Voluntary Arrangement (IVA)

DRO Application FAQS

It usually takes around two to six weeks for a decision, depending on how long it takes to process your application. Once the DRO is approved, your name will appear on the Individual Insolvency Register, which is a public record of people using formal insolvency processes like IVAs and bankruptcy.

You won’t be able to get a mortgage while a Debt Relief Order (DRO) is active, and it can remain difficult for a few years after.

Most lenders won't consider you for new credit until six years from the date your DRO is approved. Once the DRO is removed from your credit reference file, your chances of approval gradually improve. If you’re thinking about applying for credit or a mortgage, always check your contract carefully and keep your credit information up to date.

A DRO is a simpler alternative to bankruptcy, aimed at people with a relatively low level of debt, low income, and few assets.

Unlike bankruptcy, a DRO doesn’t require permission from the court, and the process is handled by the Insolvency Service instead. A DRO also comes with fewer bankruptcy restrictions, so it's a more straightforward debt solution.

Since April 2024, it’s free to apply for a Debt Relief Order in England and Wales. There’s no longer a £90 fee, making DROs more accessible for those who are eligible for a DRO. You’ll still need to work with an approved intermediary to prepare your DRO application, but there are no upfront costs.

A DRO will appear on your credit report for six years from the date it’s approved. This means it can temporarily lower your credit score and make it harder to borrow during that time.

However, once your debts are cleared, you can start rebuilding your credit history by keeping your finances up to date, using credit carefully, and making regular payments on any new accounts. A DRO can be the right choice if you need short-term debt help while working towards long-term financial stability.