The criteria for entering a Debt Relief Order (DRO) has changed and it could mean you are now applicable to enter the solution. We look at how this might affect people considering bankruptcy.
The amendments to the DRO will mean people in England & Wales who are struggling with their finances are able to enter the debt solution with more debt, higher disposable income and an increased value in assets. To determine if a Debt Relief Order is the right solution for you it’s best to speak to a debt adviser for confidential help.
If you believe a debt relief order is the right solution for you or would like more information, please call us on 0800 085 0226.
Debt Relief Order Amendments
The three major criteria changes for people entering a Debt Relief Order are:
- Debt Level: A person can now enter a DRO if they have £30,000 of unsecured debt or less, this is up from £20,000.
- Disposable Income: If someone has a disposable income of £75 per month they are eligible, this has been increased from £50.
- Assets: The maximum value for an asset has increased from £1,000 to £2,000.
These change should increase the number of people who are eligible to enter the solution. It is important to seek professional debt advice before entering any debt solution.
What Is A Debt Relief Order?
A Debt Relief Order (DRO) is a form of insolvency, it essentially allows a person to freeze interest, charges and payments on their debt for 1 year and if their circumstances don’t change the debt will be written off. This is a form of bankruptcy, however it’s a more affordable option as long as you meet the criteria.
Entering a bankruptcy will have an impact on a person’s credit file and therefore their ability to obtain credit for 6 years from the date they enter the solution.
A DRO is often most suited to people with low disposable income and low levels of debt, which they are unable to continue paying.
Am I Suitable for A Debt Relief Order?
You’re welcome to speak to one of our debt advisers to understand if a DRO is suitable for you. As a registered charity that’s authorised and regulated by the FCA, we provide you with confidential support and assistance to discuss all of your options so you can make an informed decision about your future.
Call Debt Support Trust free of charge on 0800 085 0226 and have a chat with one of our debt advisers today.
Even if you are not eligible, we will find a debt solution which suits your financial needs and there is no obligation to proceed with any advice we offer.