Debt Relief Order (DRO) – Changes to Qualifying Criteria

Written by Niall Davison on 20 January 2021

New changes to DRO criteria from June 2021

From June 29 2021, new changes were made to the qualifying criteria for Debt Relief Orders (DROs). They included:

  • Raising the maximum  debt level for DROs from £20,000 to £30,000
  • Raising the maximum asset levels from £1,000 to £2,000
  • Raising the maximum motor vehicle value level from £1,000 to £2,000
  • Raising the maximum surplus a person can have from £50 per month to £75 per month

This follows on from changes that were previously made to the old DRO qualifying criteria in October 2015, which can be seen above.  This means that more people who are struggling with debts will now be able to consider DROs as a possible debt solution. 

What is a Debt Relief Order?

A Debt Relief Order (DRO) is basically a simpler version of bankruptcy that’s generally only available to non-homeowners with little or no assets, and a monthly disposable income of £75 a month or less.

How can I apply for a DRO?

You can apply for a Debt Relief Order without attending court, and the process costs £90, which can be paid in instalments (in England & Wales only) if necessary. You can only apply for a DRO through an ‘approved intermediary’.

So, what changed in October 2015?

In October 2015 the maximum allowable debt level for a DRO increased from £15,000 to £20,000, and maximum asset limits rose £300 to £1,000. Allowable value of vehicles in a DRO was also limited to £1,000. 

How does a DRO work?

With a Debt Relief Order, the debts listed in it are discharged (written off) a year after the DRO is approved, and you will then be free from those debts.

Anything to be aware of?

The disadvantages of Debt Relief Order are that a record will remain on your credit file for six years. This will have a serious impact on your credit rating, and obtaining further credit is likely to be very difficult during this time.

You may also face restrictions on working in certain professions in the future, and your DRO will also be added to the Individual Insolvency Register.

How to find out more?

The Insolvency Service’s ‘Guide to Debt Relief Order’ gives further information on how it works and what to do next. Visit www.gov.uk in England & Wales (or www.detini.gov.uk in Northern Ireland) and search for ‘debt relief order’ to download a copy of the guide. If you wish to proceed with a DRO application, please follow the instructions in the guide.

Further advice about Debt Relief Orders is available from your local Citizens Advice Bureau (CAB) if you live in England or Wales, or from Debt Action NI if you live in Northern Ireland.


Filed under Debt Facts

This article was checked and deemed to be correct as at the above publication date, but please be aware that some things may have changed between then and now. So please don't rely on any of this information as a statement of fact, especially if the article was published some time ago.

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