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A debt relief order (DRO) is designed for people with few assets. An asset is something of value you own that can be sold to raise money.
If you live in England or Wales and your assets total more than £2,000, or £1,000 in Northern Ireland, you can't apply for a debt relief order.
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Examples of assets could include:
These assets are valued by how much you would get if they were re-sold in their current condition, not the amount you purchased them for.
Which assets aren’t included in a DRO?
When totalling up how much your assets are worth, there are certain assets the official receiver dealing with your DRO won’t count.
These items include:
Do you qualify for a debt relief order?
To qualify for a DRO, your total assets cannot be worth more than £2,000 if you live in England or Wales, or £1,000 if you live in Northern Ireland. However, you can also own one domestic vehicle worth up to £2,000 in England or Wales (or £1,000 in Northern Ireland) on top of this.
You’ll need to provide details of your vehicle including the make, model and registration number. Your vehicle’s value will be checked and if it appears to be worth more than £2,000 (£1,000 in Northern Ireland), you'll need to provide valuations from two independent motor dealers.
If you own a vehicle that’s used for business purposes only, it’ll be counted as part of the total assets you’re allowed. This means that if your business vehicle is worth more than £2,000 (£1,000 in Northern Ireland), a DRO won’t be possible.
If your vehicle has been specially adapted to help you with a physical disability, the limits above don’t apply.
If your car is on hire purchase (HP) the finance company owns the car, and it won’t count as part of your assets.
If your HP is due to end within span of your DRO, you will have paid off the finance and now own the car. At this point, if your car is worth more than £2000 (the car asset limit) your DRO could be cancelled.
If you own your home, you cannot apply for a debt relief order even if your home is in negative equity. Find out about other debt solutions.
If you're thinking of applying for a DRO, get free, impartial debt advice first. We'll then recommend the best solution for your situation.