Debt Relief Order

A Debt Relief Order (DRO) is a formal insolvency process that can help you deal with your debts. Get in touch with Basik Money to see how we can help.

Bankruptcy Help and Advice

Basik Money will provide you with advice and put you in touch with an Insolvency Practitioner. Bankruptcy can have serious financial implications so is often the last resort and is usually applied for when no meaningful alternative can be offered to creditors.

Basik Money will provide you with advice and put you in touch with an Insolvency Practitioner. A Debt Relief Order (DRO) is a formal insolvency process that can help you deal with your debts if you owe less than £20,000, don’t own your home and have little spare income.

DROs are available if you have assets of less than £1,000 (including a vehicle which must be worth no more than £1,000) and you owe less than £20,000. You must also have a disposable income of less than £50 per month.

Get in touch with Basik Money today to find out how we can help you.

Debt Relief Order Criteria

  • You must be unable to afford current repayments and charges
  • You must owe less than £20,000 in unsecured debts
  • You must include ALL your debts
  • Only non-essential items that can easily be sold are taken into account
  • You must have a disposable income of no more than £50 per month
  • You must not be currently involved in another formal insolvency procedure
  • You cannot be a homeowner
  • Your vehicle must be worth no more than £1,000 (unless it is a registered disability vehicle)
  • You cannot have been subject to another DRO in the previous six years

You cannot apply for a DRO if your creditors have applied to make you bankrupt but the hearing hasn’t yet taken place, unless your creditors agree that you can apply.

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Advantages of a DRO

  • DROs are a low cost alternative to bankruptcy. The cost of a DRO is £90 which is much cheaper than Bankruptcy
  • All of your qualifying debts are included in your DRO
  • You won’t need to pay anything towards your debts for 12 months and after that, presuming your circumstances have not changed, your debts will be written off
  • Your debts will be written off in full at the end of the DRO
  • Your creditors can’t take any action over the money you owe
  • Your creditors can’t take any action over the money you owe

Disadvantages of a DRO

  • You may also be subject to a Debt Relief Restrictions Order. This can extend the period of restriction for up to 15 years for debtors who are deemed dishonest or culpable to the extent of their financial difficulties.
  • The strict criteria as above can be difficult to meet
  • If you have a favourable change in circumstances during the 12-month period your DRO may be revoked and all your debts, plus accruing interest, will become recoverable again
  • Homeowners are excluded from applying for a DRO, even if there is negative equity in the property
  • A one-off fee of £90 has to be paid to the Official Receiver
  • A DRO remains on public records for 15 months and will stay on your credit record for six years
  • You may only apply for a DRO once every six years

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