The Debt Counsellors has staff who are Approved Intermediaries who can assist you complete an application for a Debt Relief Order (DRO)
An approved intermediary is someone who has been approved by a competent authority chosen by the Insolvency Service, which is a Government Department.
The Debt Counsellors Competent Authority is the Institute of Money Advisers.
We will check that your situation fulfils the criteria and will help you complete the online form, and submit it for you to a government official called the official receiver.
The official receiver then makes the order, if appropriate.
Advantages of a DRO
- Your debts will be written off at the end of the DRO. There are a few exceptions, as explained below.
- None of the creditors listed in the DRO application can take further action against you without the court’s permission.
- It allows you to make a fresh start after 1 year.
- The fee (£90) is affordable and can be paid in instalments but the fee must be paid before the application can be made.
- You will keep your assets and a vehicle as detailed below.
- The approved intermediary ensures that you are given appropriate advice and that you fit the criteria for a DRO.
Disadvantages of a DRO
- Your DRO is entered on a public register.
- You can’t have a DRO if you have an existing bankruptcy order, an IVA, are subject to bankruptcy restrictions, or you have had a DRO in the last 6 years.
- You won’t be able to have a DRO if you own a house, even if it has no equity (value).
You will remain liable to pay certain debts – in particular:
- Student loans
- Debts arising from family proceedings
- Budgeting loans and crisis loans owed to the Social Fund.
- Your employment may be affected.
- Your DRO could be revoked (withdrawn) if you don’t co-operate with the official receiver during the year your DRO is in force.
- You can’t act as a director of a company or be involved in its management unless the court agrees.
- You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to a DRO.
- You may have a debt relief restrictions order* made against you for 2 to 15 years if you acted irresponsibly, recklessly or dishonestly.
*An order that will place restrictions similar to those in force while subject to a DRO, which the official receiver may apply for.
Qualifying for a DRO
In order to qualify for a Debt management plan you will need:
- Your debts must not exceed £20,000;
- Your assets must not exceed £1,000 (certain assets do not count, for example clothing and furniture);
- You must not own a vehicle worth more than £1,000; and
- Your surplus income must not exceed £50 a month after paying your essential personal and household spending.
A DRO will last for 1 year, and once your DRO has ended you are released from your debts (with certain exceptions).