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How will a DRO affect me

Debt relief orders and contact from creditors

Once your debt relief order (DRO) has been approved, the official receiver will contact each of the creditors included in your application, to let them know it's been approved. But, in some cases your creditors may still contact you.

If this happens to you after your DRO is approved, don't worry. There are still steps you can take to ease the stress you may be dealing with, and your DRO provider is here to assist you should you have any concerns. Once the 12-month moratorium period is over, if your situation hasn’t improved, the debts included in the debt relief order are written off.

You won’t receive notification that a DRO has ended, so it’s worth noting down the date it was originally approved.

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Can a debt relief order stop bailiffs?

In most cases, creditors are legally bound not to chase you for payments towards any debts included in your DRO. However, if you have a controlled goods arrangement already in place with a bailiff, your DRO won’t stop them taking and selling your property. So it’s important to keep up with payments.

If you have rent arrears or a debt on a hire purchase agreement, your landlord or lender may take action to recover their property.

Find out more about dealing with bailiffs.

What’s the difference between a creditor and a debt collector?

There’s no real difference. A debt collector has the same legal rights and obligations as the creditor.

A debt collector could work for:

  • the creditor
  • a third party who’ve been hired to collect debts
  • a company who bought the debt from the creditor

Enforcement agents, also known as bailiffs, have different rights and powers. Find out about the difference between debt collectors and enforcement agents (bailiffs).

What if I included benefit overpayments or priority arrears in my DRO?

Any benefit overpayments or priority arrears (household bills that you've fallen behind with) that were in your DRO application will have been written off at the end of the 12-month moratorium period.

Deductions from your benefits

If you're having a benefit overpayment or any household arrears deducted directly from your benefit payment, this should stop as soon as they receive notification that your DRO has been approved.

The Insolvency Service will send them this notification. This will mean that your income will go up a bit as the payments will have stopped. The DRO provider should have already taken this into account so you don't need to contact them or the Insolvency Service.

If you find that money is still being deducted from your benefits after your DRO has been approved then you should contact the benefits agency to let them know about your DRO.

It's worth being aware that Social Fund loans aren't included in a DRO. However, the DWP will normally stop Social Fund deductions during a DRO moratorium period.

Pre-payment meters

If you pay for your gas or electricity through a pre-payment meter and your arrears were included in your DRO, your utility company will need to adjust your meter to stop these payments being taken. They'll be informed about your DRO by the Insolvency Service. If they don’t update your meter promptly, contact your supplier directly to tell them about your DRO.

Priority arrears

If you include any household arrears in your DRO application (like council tax, gas or electricity) you can stop paying these as soon as it's approved.

If you normally pay your arrears by Direct Debit, you need to contact the company and ask them to change the amount you're paying so that it just covers your normal payment. If you pay by standing order, you’ll have to contact your bank to change the payments yourself.

Can a creditor collect on a discharged debt?

Some creditors may sell your debt to a collection agency during your DRO moratorium period. Because the official receiver doesn’t always write to the collection agency, they may not be aware you have a DRO, and that the debt they’re collecting for has already been discharged.

signpost iconYou'll need to let this new company know. You can do this by sending them a copy of your approval letter as proof the debt is included in your DRO.

The collection agency could also check the Insolvency Register themselves, or they can ask the original creditor who would have been told about the DRO.

What your creditors can't do if you're on a DRO

There are certain things that your creditors can't do:

  • Contact you to ask for payment
  • Take you to court
  • Send a debt collector to your home 

If any of the creditors listed in your DRO application do any of these then you should remind them about your DRO. If they still carry on doing these things after you've reminded them, you should contact the DRO team at the Insolvency Service. They'll take this up with the creditor.

What does it mean when a creditor ‘discharges a debt’?

Discharging a debt means it’s cancelled, because it’s been included in your DRO.

When a debt is discharged, you’re no longer liable for the debt. The creditor can’t make any more attempts to recover the money owed if you meet the conditions set for your DRO.

Find out if a DRO is right for you

Online debt advice is available 24 hours a day. It’s free and confidential, and you can use it to build a budget and get your personal action plan.

Or you can call us for expert advice (Free from all landlines and mobiles.

How often can I apply for a debt relief order?

Once you’ve applied for a debt relief order and have had a successful application, you won’t be able to apply again for another for six years. This applies even if your previous DRO was cancelled after approval.