How-To-Apply-For-A-Debt-Relief-Order-by-Consumer-Debt-Help

How To Apply For A Debt Relief Order?

A Debt Relief Order (DRO) is an effective way of dealing with unmanageable debt. It can help you to get your finances back on track by freezing interest and charges, and stopping bailiffs from coming to your home. It’s extremely common for people to wonder how to apply for a Debt Relief Order. Here we explain the process and requirements in detail.

To apply for a DRO, you will need to complete an application form and provide evidence of your debt. The form can be downloaded from the gov.uk website.

You will also need to provide:

  1. Proof of your identity, such as a passport or driving licence.
  2. Evidence of your address, such as a recent bank statement or Council Tax bill.
  3. Details of all your debts, including the amount and how you are being repaid.
  4. Proof that you can afford to make the monthly repayments on your debts.

If you are successful in your application, a DRO will be granted for 12 months. This will give you time to get your finances under control and start paying off your debts.

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How much debt do you have?

Less than £1,000
£1,000-£5,000
£5,000-£10,000
more than £10,000

What do I need to apply for a Debt Relief Order?

To apply for a Debt Relief Order, you’ll need to meet certain criteria. You must be insolvent, meaning you can’t pay your debts as they come due. You must also owe less than £20,000 in total, and any assets you own must be worth less than £300.

If you meet these criteria, you can apply for a Debt Relief Order. This will stop most of your debts from being collected. It will also freeze interest and charges on your debts, and prevent creditors from taking legal action against you.

A Debt Relief Order lasts for 12 months. At the end of that time, your debts will be written off if you haven’t repaid them. If you have repaid at least part of your debts, the remaining balance will be written off.

A Debt Relief Order can be a good option if you’re struggling with debt and don’t think you can repay your debts in full. It can provide some relief and may help you get back on track financially.

What type of debt does a Debt Relief Order cover?

Debt relief orders (DROs) are a type of insolvency proceeding that can be used to help people who are struggling with debts of £20,000 or less. A DRO is a way to deal with unmanageable debts without having to go through bankruptcy.

A DRO will cover most types of debt, including unsecured debts such as credit cards, personal loans, and payday loans. It will not cover secured debts such as mortgages and car loans, or debts owed to the government such as tax arrears or social security payments.

To apply for a DRO, you must be living in England or Wales, have less than £20,000 of unsecured debt, and have no more than £50 per month disposable income after essential expenses are paid. You must also be able to pass a ‘fit and proper person’ test.

If your application is accepted, the DRO will last for 12 months. During this time, you will not be able to borrow money or take out new credit agreements. You will also have to disclose your DRO to any potential new creditors.

At the end of the 12-month period, the debt will be written off and you will be discharged from your DRO. This means that you will no longer be legally obliged to pay any of the debts included in the order. However, you may still have to repay some or all of the debt if you are able to do so.

What is the process of applying for a debt relief order?

The first step in applying for a DRO is to gather all of your financial information. This includes your current income and expenses, as well as your outstanding debts. You will need to provide this information to the court when you apply for a DRO.

If you are considering applying for a DRO, it is important to speak with an insolvency expert beforehand. An insolvency expert can help you determine whether a DRO is the right option for you and can guide you through the application process.

If the court approves your application for a DRO, you will be required to follow several rules. You will be prohibited from taking out new credit cards or loans, and you will be required to make monthly payments to your creditors. You will also be required to provide regular updates on your financial situation to the court.

A DRO can provide much-needed relief from overwhelming debt. If you are considering applying for a DRO, contact a professional today for more information.

How does it affect my credit rating?

Well, when you apply for a DRO, your creditors are notified. They’ll then place a “DRO flag” on your credit file, which will stay there for six years. This flag will show up on any credit checks that are carried out during that time period.

As such, this means that your credit score will be lowered, and you’ll find it harder to get approved for loans or credit cards. In fact, some lenders may refuse to work with you altogether if they see that you have a DRO flag on your file.

So is a DRO worth it?

That depends on your individual situation. If you’re struggling with debt and you can’t see any way out, then a DRO may be the best option for you. But if you’re able to repay your debts without help from a DRO, then it’s probably not worth the risk.

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