Should you need a DRO expert?

Debt Relief Order plays a significant role to avoid penalties

11:07 30 September 2013

What are the mechanics of a DRO?

Upon approval of your DRO, your debts are frozen for 12 months.  This means your creditors cannot force you to make payments during this time. Likewise, after the 12 month period and your situation didn’t improve, your debts are then written off.  Regardless whether additional charges such as interests and penalties are added, your debts are written off unless there is a cancellation of your DRO during that period.

 

Who can be eligible for a DRO?

You may be eligible to apply for a DRO if you:

• Have debts not more than £15,000
• Have a monthly capability of not more than £50 
• Have no more than £300 worth of assets
• Have been living in England and Wales for the last 3 years
• Have no previous application for a DRO for the last 6 years

 

What are the restrictions when you applied for a DRO?

If your DRO is approved, you will not be able to:

• Ask for a loan more than £500 without informing your lender regarding your DRO
• Become a director of a company
• Put up, manage or even promote any company without asking the court for permission as well as without informing your business deals about your DRO

 

What are the other forms of debts which cannot be included in a DRO?

Student loans, magistrates' fines, child support arrears, any claims for damage or personal injury that have been against the person applying for a DRO and any debts incurred under the Proceeds of Crime Act cannot be included in a DRO.

 

What is the effect of DRO on your credit rating?

A DRO will be listed in your credit file for 6 years and you will not be allowed to take out any additional credit during this time.