Debt Relief Order: You might be struggling to pay your debts, but there’s no need to lose hope. Debts can be written off in some situations, and if your income doesn’t allow you to repay the money, you might be eligible for a debt relief order in the UK. Here’s what you need to know about this process, including whether or not you can qualify.
What is a DRO?
A DRO is a formal insolvency procedure that can give you time to pay your debts off. If you’re struggling to repay your debts and meet your financial obligations, you might be eligible to apply for a DRO. Once granted, a DRO lasts for 12 months and during this time, your creditors cannot take any further action against you. This can give you some breathing space to get your finances back on track.
How do I get a DRO?
If you live in England, Wales or Northern Ireland and can’t pay your debts, you might be able to get a debt relief order (DRO). This will give you some time to sort out your finances. To get a DRO, you must:
1) owe £20,000 or less
2) have £50 or less left after paying your essential bills
3) not own your home
4) not have been bankrupt in the last year
5) not have had a DRO in the last year
6) not have had certain types of debt management plan or Individual Voluntary Arrangement (IVA) in the last year
7) not have enough money to pay write off debts.
How do I make sure my creditors pay me if I have a DRO?
A DRO is a formal debt solution that can be used if you owe less than £20,000, have little to no surplus income, and your assets are worth less than £1,000. If you think you might be eligible, you can Apply for an IVA online. Once your application is approved, an official receiver will be appointed to oversee your case and make sure your creditors are paid.
Are there any drawbacks to getting a DRO?
While a DRO can give you some much-needed debt relief, there are some drawbacks to consider before you apply. For one, your credit score will take a hit, which can make it difficult to get loans or credit cards in the future. Additionally, you’ll be required to adhere to certain restrictions, such as not taking on any new debt during the DRO period. Finally, if your financial situation improves during the DRO period, you may be required to repay some or all of your debts.
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