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How will a DRO affect me

The DRO moratorium period

If you’re accepted for a debt relief order (DRO) you’ll start a 12 month moratorium period. At the end of the moratorium period all the debts included in your DRO will be written off.

During these 12 months, you still have to meet the criteria for a debt relief order. If your situation changes, there’s a risk your DRO could be cancelled, and you’ll have to look into alternative ways to deal with your debts. This could happen if there’s a significant change in your situation, such as an increase in income. Once your DRO is approved, you must tell the official receiver about any changes in your circumstances. 

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What changes in my circumstances could affect my DRO?

An improvement in your circumstances during the moratorium period could mean that you no longer meet the criteria for a DRO. This may be the case if your monthly disposable income increases to more than £50.

Some of the ways your situation may improve include:

  • Starting a new or better paid job
  • Receiving a pay rise
  • The amount of benefits you're entitled to increases.
  • You become entitled to extra benefits you're not currently getting

Your DRO shouldn’t be affected by a small decrease or increase in your income. However, if you have any concerns at all, you’ll need to contact the Insolvency Service. They'll review your budget and see if you still meet the criteria for your DRO.

 

What if I get a lump sum of money during the moratorium period?

Receiving a lump sum of cash or a valuable asset may affect your debt relief order. This is because a DRO is granted on the grounds that you don’t have the financial means or assets to pay your debts off.

If you receive a lump sum or any assets of value while you're on a DRO you MUST let the Insolvency Service know about it.

Lump sums could come from:


  • An inheritance
  • Winning the lottery (you never know!)
  • Compensation from an accident
  • Backdated benefit payments
  • PPI reclaims 

If you receive a lump sum or an asset during your moratorium period, your DRO shouldn’t automatically be revoked (cancelled) as long as:


  • The amount is less than £1,000
  • It's worth less than 50% of the total amount of debt you owe
  • You tell the Insolvency Service DRO Team within 14 days of receiving it. If they find out this information from someone else they WILL revoke your DRO.

If the amount is £1,000 to £1,850, the Insolvency Service DRO Team will make a decision based on your personal circumstances.

If it's worth more than £1,850 your DRO will normally be revoked.

When will I find out my DRO moratorium has finished?

At the end of the moratorium, you won’t be contacted to make you aware.

If you’ve forgotten your DRO completion date, you can look it up on the Individual Insolvency Register. This shows you the date the DRO was approved, and the date the moratorium is due to end.

Can I get proof that my DRO is complete?

You can prove that your DRO has finished by printing off a copy of your entry on the Individual Insolvency Register which shows the date the moratorium ends. The public record of your DRO will only be accessible for three months after the completion date. Once this has passed, the record will be removed. If you need further help after this date, please contact the Insolvency Service. 

A creditor doesn’t accept that my DRO has ended – what can I do?

On very rare occasions, a creditor may try to collect a debt that was included in your debt relief order. If this happens, you do not have to pay them and you can challenge any attempt to collect the debt.

If a creditor tries to pursue a debt after your DRO is complete, you can send them a printed copy of your entry in the Individual Insolvency Register. If a creditor continues to demand payment, make a complaint and contact their regulator or ombudsman if necessary.

Please be aware that creditors can continue to request payments for some debts, including:

These debts cannot be included in a DRO. In addition, a creditor can resume collecting a debt after the end of the moratorium if the debt was fraudulent, for example as a result of benefit fraud.

Although creditors included in a DRO can’t take any action to recover money you owe, they can still take action to recover assets in some cases.  This means for example, a landlord could evict you from a rented property after your DRO is completed because of rent arrears, even though they couldn’t take any action to collect the arrears from you.  In a situation like this, you may want to continue paying the debt so you don’t lose the tenancy. 

Need debt help?

If you need help with your debts or to work out how much you can afford to pay towards them, we can help. Use our online debt advice tool which can help you put together a budget and offer practical advice on dealing with your debts.

Or, if you'd prefer, you can also call our debt advice team and talk to one of our advisors (free from all landlines and mobiles).