Debt Relief Order (DRO): Writing Off Debt in 12 Months
A Debt Relief Order (DRO) is a way to write off your debts if you have little or no assets, a low income, and qualifying debts of up to £50,000. Unlike bankruptcy, a DRO is free to apply for, lasts 12 months, and does not require you to go to court. At the end of the DRO period, your debts are written off completely. This guide explains who qualifies, what it covers, and how to apply.
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England, Scotland, Wales & Northern Ireland.
What is a Debt Relief Order?
A DRO is an insolvency procedure for people who cannot afford to pay their debts and have few assets. Key features:
- ✓Lasts 12 months, at the end, qualifying debts are written off (discharged)
- ✓During the 12 months, creditors cannot take any action against you to collect the debts
- ✓No court appearance required
- ✓Free to apply for, the £90 application fee was abolished in 2024
- ✓Must be applied for through an authorised debt adviser, not directly to the Insolvency Service
- ✓Available in England, Wales, and Northern Ireland, Scotland has different rules (see Minimal Assets Process)
Do you qualify for a DRO?
As of June 2024, the qualifying criteria were updated. You can apply for a DRO if:
- ✓Total qualifying debts of £50,000 or less (increased from £30,000 in June 2024)
- ✓Surplus income (income left after reasonable expenses) of £75 or less per month
- ✓Total assets of £2,000 or less (increased from £1,000 in June 2024), but see vehicle exclusion below
- ✓Motor vehicle: if you own a car worth over £4,000 (increased from £1,000 in June 2024), you do not qualify
- ✓You have lived or worked in England or Wales in the last 3 years
- ✓You are not a homeowner, properties count as assets and disqualify you
- ✓You have not had a DRO in the last 6 years
- ✓You are not currently bankrupt, in an IVA, or subject to a Bankruptcy Restrictions Order
What debts are included in a DRO?
A DRO covers most types of unsecured debt:
- ✓Credit cards and store cards
- ✓Personal loans and overdrafts
- ✓Utility bill arrears (gas, electricity, water)
- ✓Rent arrears
- ✓Council tax arrears
- ✓Benefits overpayments (in most cases)
- ✓Payday loans
- ✓Mobile phone contracts
- ✓Buy now pay later debts
Debts NOT covered by a DRO:
- ✓Secured debts (mortgage, secured loans)
- ✓Student loans
- ✓Court fines and confiscation orders
- ✓Child maintenance arrears
- ✓Social fund loans
- ✓Debts arising from fraud
- ✓Certain HMRC debts
What happens during the DRO period?
During the 12-month DRO period (called the "moratorium period"):
- ✓Creditors included in the DRO cannot contact you to chase payment
- ✓Creditors cannot apply for a CCJ, send bailiffs, or take any other enforcement action
- ✓You must not obtain credit of £500 or more without telling the lender about your DRO
- ✓You must not act as a company director without court permission
- ✓You must report any increase in income or assets to the Official Receiver
- ✓Your DRO is recorded on the Individual Insolvency Register (publicly searchable) for 15 months (12 months + 3 months after)
- ✓Your credit file will be affected for 6 years from the date of the DRO
How to apply for a DRO
DRO vs bankruptcy vs IVA, which is right?
- Cost: free
- Debt limit: £50,000
- Lasts: 12 months
- No court
- Low income/assets only
- Debts written off at end
- Cost: £680
- No debt limit
- Lasts: typically 12 months
- Court petition
- Can own property (may need to sell)
- More restrictions during
- Cost: high fees from payments
- No formal limit
- Lasts: 5 to 6 years
- No court
- Need income to make payments
- Partial debt written off at end
Scotland, Minimal Assets Process (MAP)
Scotland does not have DROs. The equivalent is the Minimal Assets Process (MAP), which is a type of sequestration (bankruptcy) with simplified rules:
- ✓Available if you have debts between £1,500 and £25,000
- ✓Your assets must be below £2,000 (with a similar vehicle exemption to DRO)
- ✓Your income must leave you with a surplus of less than £100/month after expenses
- ✓Cost: £50 application fee
- ✓Discharge: after 6 months (faster than standard sequestration)
- ✓Apply through MAPS (Money Advice Service) or Citizens Advice Scotland
Get instant help right now
A Citizens Advice appointment can take weeks. Our free assistant is available 24/7 with no appointment, giving you clear, step-by-step answers about your exact situation, what to do next, and the deadlines that matter.
Need to take action? It can draft a ready-to-send formal letter for you (optional, from £4.99).
England, Scotland, Wales & Northern Ireland.
Frequently asked questions
What is a Debt Relief Order (DRO)?
A DRO is an insolvency procedure that writes off qualifying debts of up to £50,000 after a 12-month period, if you have low income (surplus under £75/month) and few assets (under £2,000). It is free to apply for, requires no court appearance, and must be applied for through an approved free debt advice intermediary. During the 12 months, creditors cannot take enforcement action against you.
How much debt can a DRO write off?
A DRO can write off up to £50,000 of qualifying unsecured debt. This threshold was increased from £30,000 in June 2024. Debts that cannot be included in a DRO include mortgages, student loans, court fines, child maintenance, and debts arising from fraud.
How much does a DRO cost?
A DRO is free, there is no longer any application fee, the £90 fee was abolished in 2024. Approved intermediaries (StepChange, National Debtline, Citizens Advice) help you apply for free. Never pay a private firm to set up a DRO, the application must be submitted by an authorised intermediary.
Does a DRO affect my credit rating?
Yes. A DRO stays on your credit file for 6 years from the date it is made. It also appears on the Individual Insolvency Register for 15 months (12 months during the moratorium, plus 3 months after). During the DRO period, you cannot obtain credit of more than £500 without telling the lender about your DRO.
Can I get a DRO if I own a car?
You can still get a DRO if you own a car worth up to £4,000 (updated threshold from June 2024). If your car is worth more than £4,000, the excess value counts toward your asset limit. If your total assets (including the car's value above £4,000) exceed £2,000, you will not qualify.
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