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How long does a Debt Relief Order take to process?

Applying for a Debt Relief Order (DRO) takes, on average, four to five weeks.

Once approved, you’ll enter a moratorium that lasts 12 months. The moratorium period means you’ll have some restrictions you’ll need to stick to.

What are the restrictions of a Debt Relief Order?

In the moratorium period, you can’t:

  • apply for credit of more than £500 without letting the lender know that you’re in a DRO
  • change the name of a business you’re running without letting everyone you do business with know that you’re in a DRO
  • act as the Director of a Limited company without permission from the court
  • be involved with setting up, managing, or promoting a limited company without permission from the court
  • add any new debts or debts you’ve forgotten about once the DRO is made

Not complying with the restrictions can have serious consequences if you’re found to have committed an offence; you could be fined or sent to prison, or the Official Receiver can request that the restriction period be increased by up to 15 years.

If you receive notice that restrictions are being increased against you, these can be appealed if you have evidence that you have done nothing wrong.

Will I need to make payments to the companies I owe money to?

You need to continue paying your everyday household expenses, such as rent, council tax, and utility bills, while your DRO is being processed. Once it’s approved, you’ll need to continue paying for these.

While it’s being processed, we recommend making a payment of what you can afford to each of the companies you owe money to. You’ll need to speak directly with the companies you owe money to and let them know that you’ve applied for a DRO and if you can afford to make a payment. The minimum token payment is £1 to each of these companies; however, if you can’t afford to make any payment, make sure to let them know.

If you have any excluded debts, such as CSA arrears or student loans, you’ll need to continue paying them outside of your DRO.

A DRO won’t stop bailiffs from taking control of your possessions via a controlled goods agreement if it was in place when the DRO was approved.

If this happens and you wish to have them returned to you, you may have to repay what you owe. If you have rent arrears, a DRO will include these as part of the total amount you owe. In a DRO, your landlord can take further action against you. So, you may have to continue paying your rent arrears to stay in your home.

Any debts included in your DRO will be written off once it’s processed and complete. If you have any debts that were considered fraudulent, you’ll need to make payments to these until it’s fully paid off.

What happens when a DRO is made?

Once you’ve applied for a DRO and it’s been approved, a few things will happen to begin the process.

Here is a quick breakdown of what happens next:

  • First, you’ll receive written confirmation from the Official Receiver that your Debt Relief Order has been approved. You’ll be made aware of what you need to do and all restrictions and requirements you need to comply with will also be outlined at this stage.
  • The companies you owe money to will be notified that you have entered a DRO.
  • The details of your DRO will be added to the Insolvency Register and it’ll appear on your credit report.

What happens if I come into money while my DRO is being processed?

If your circumstances change, you must first notify the Official Receiver dealing with your DRO.

What is classed as a change in circumstances?

  • If you receive a large windfall – such as inheritance money or a job bonus
  • If you receive or sell any large assets left to you in a will
  • If you realise something is wrong with your application or there’s missing information
  • Your income increases, and you change employment or move address

These things can make a big difference to your DRO, so you must notify the Insolvency Service immediately. If you fail to tell your Official Receiver of any changes, you’re committing an offence and could see restrictions placed on you for longer, a fine or even imprisonment in more serious cases.

It’s important you fully understand the effects a DRO can have on you and your financial situation. You can find out more about DROs via our dedicated section on the website.

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