Debt relief orders
In England and Wales, if you cannot pay your debts and you meet the eligibility conditions, you can apply for a debt relief order (DRO).
To qualify, you must satisfy the following.1Sch 4ZA Insolvency Act 1986 •You must be unable to pay your debts.
•Your total debts must be no more than £50,000.2The Insolvency Proceedings (Monetary Limits) (Amendment) Order 2024 No.626 •Your total assets must not be more than £2,000, although you are also permitted to additionally own a vehicle worth up to £4,0003Insolvency (England and Wales) (Amendment) Rules 2024 No.622 (or more if it has been adapted because you have a disability). •Your disposable income after deducting allowable expenses must not be more than £75 a month.
•You do not own your home.
•You have lived, worked or had a property in England or Wales at any time during the last three years.
•You must not have been subject to a DRO within the last six years.
•You must not be involved in any other formal insolvency procedure at the time of application for a DRO.
Under a DRO, recovery action by creditors to obtain money from you is stopped and at the end of a set period (usually a year) the debts are cleared. So, for example, a supplier cannot take any further action against you such as disconnection in respect of fuel arrears included in a DRO.
Certain debts are excluded from a DRO and it will negatively affect your credit. See CPAG’s Debt Advice Handbook for further details. Although you can include fuel arrears in the order, you are expected to meet the costs of future fuel consumption and should include these in your expenditure figures.
There is no upfront fee to apply for a DRO.4 DROs are administered by the Official Receiver through the Insolvency Service. You can only apply through an approved third party or intermediary. These are usually debt advisers who have authority to complete the online application. To find your nearest approved intermediary, contact your local free advice agency.5See