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i England, Wales and Northern Ireland

What is a DRO

Which debts are written off by a debt relief order?

Only certain types of debts, called 'qualifying debts', can be included in a debt relief order (DRO).

These must not be valued more than:

  • £30,000 if you live in England or Wales
  • £20,000 if you live in Northern Ireland

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?

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Considering a DRO?

We can help with free, impartial debt advice online now.

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Hire purchase agreements and your DRO

Hire purchase or conditional sale items are not legally yours until you pay for them in full.

To start a DRO, you may have to:

  • Return the item, or
  • Transfer ownership to someone else

In some cases you can keep paying a hire purchase agreement but only if:

  • The goods are ‘essential’
    • For example household appliances you need to live
  • The payments are up to date and you have no arrears

Get free and impartial debt advice now

We can help if you think a DRO might be right for you.

Use our free, online debt advice tool to find the best solution for you.