Understanding How to Qualify for a Debt Relief Order in the UK

Debt Relief Orders (DROs) are a viable debt solution for individuals facing financial difficulties in the UK. Designed to help those with low income and minimal assets, a DRO offers a temporary reprieve from creditors and a path towards financial recovery. In this post, we delve into the qualifications required to obtain a Debt Relief Order in 2026, complete with actionable tips and guidance to ensure you can navigate this process effectively.

What is a Debt Relief Order?

A Debt Relief Order is a formal debt solution aimed specifically at individuals who owe less than £30,000, have a low disposable income, and possess few to no assets. It essentially freezes debt repayments and creditor contact for a period of 12 months. If your financial situation hasn’t improved by the end of this period, all of the debts listed in the DRO are likely to be written off.

Eligibility Criteria for a Debt Relief Order

To qualify for a DRO, applicants must meet specific criteria which include:

• Debt Limit: Total qualifying debt must not exceed £30,000.
• Asset Value: You must not own assets worth more than £2,000 in total.
• Disposable Income: After deducting tax, national insurance and normal household expenses, your disposable income should be no more than £75 per month.
• Residency: You must have lived or worked in England or Wales within the last three years.

It’s important to note that not all debts can be covered by a DRO. Exclusions typically include court fines, student loans, and child support payments, among others. For a full list of which debts are covered or excluded, the UK Government’s information page on DROs offers comprehensive guidance.

Application Process for a Debt Relief Order

The application for a DRO must be made through an authorized debt advisor. You cannot apply directly. The advisor will assess your financial situation to ensure that a DRO is the most suitable option and help you fill out the necessary paperwork.

For finding an authorised advisor, organisations like Citizens Advice, StepChange Debt Charity, and National Debtline can provide free advice and possibly assist in the application process.

Costs Involved

A fee of £90 is required to process a DRO application. This fee can be paid in installments but must be paid in full before the application can be processed. Some charities may be able to help if you cannot afford the fee.

Actionable Tips for Potential DRO Applicants

• Gather Financial Documentation: Compile detailed records of your financial transactions, debt statements, and assets.
• Explore Free Debt Advice: Utilize free resources and counselling from recognized UK debt advice services to understand all available debt solutions.
• Assess Your Situation Honestly: Evaluate your income, expenses, and debts thoroughly to ascertain if a DRO is the best course of action.

Being thorough in your preparations and honest about your financial situation are crucial steps in successfully applying for a Debt Relief Order. Remember, a DRO is a powerful tool for debt management but it comes with responsibilities and impacts your credit status. Carefully consider if it’s the right path for your situation and seek professional advice to guide you through the process.

We hope this post has provided you with a clearer understanding of how to qualify for a Debt Relief Order in the UK. If you decide that a DRO is the right option for you, following these guidelines will help streamline your application process towards achieving financial relief.