Which debts are written off with a DRO?
Declare all of your debts when you apply for a debt relief order (DRO).
- You cannot add a debt you forgot after the DRO starts
- You must pay any missed debts yourself
- Your DRO can be cancelled if a missed debt takes your total over the limit
A DRO lasts for 12 months from the date it is approved.
The included debts are written off if your situation is not better by the end of the 12 months.
A DRO can include debts like:
- Arrears on household bills
- Rent
- Gas
- Electric
- Telephone
- Council tax
- Consumer debts
- Benefit overpayments
- Unless they were due to fraud
- Hire purchase (HP) or conditional sale agreements
- Items bought on finance
- Including buy-now-pay-later agreements
- Loans from friends or family
You do not make any payments to the debts in your DRO over the 12 months. This is known as the 'moratorium period'.
Which debts cannot be included in a DRO?
Some types of debt will not be written off by a DRO and you have to keep paying them.
The following ‘excluded’ debts do not count towards the permitted limit:
Fraudulent debts are treated differently:
- They are not written off at the end of the DRO
- They do count towards the maximum debt limit
Are loans from family and friends included in a DRO?
Loans from friends or family must be included in a DRO.
This means:
- The person who lent you money cannot take action to collect
- You cannot make payments to them after the DRO starts
They need to treat the loan as a gift for you to go ahead with the DRO.
You may be able to pay them in another way, like:
- Offer to do jobs around the house
- Gardening
- Babysitting
Do not try to pay off money you owe to a friend or family before your DRO starts.
- This could be seen as unfair to the other people you owe
- Your DRO could be refused as a result
Is a DRO right for you?