What are the benefits of a Debt Relief Order?
Benefits of a DRO
- A debt relief order can be a low-cost alternative to bankruptcy.
- You don’t pay anything towards your debts for 12 months.
- Your creditors can’t pursue you for your debts during the 12 month period.
- Although a DRO is a formal debt solution, you don’t need to appear in court.
How Does debt relief Work UK?
A Debt Relief Order (DRO) is a way of dealing with your debts if you can’t afford to pay them. It means you don’t have to pay certain kinds of debt for a specified period (usually 12 months). At the end of the DRO period, the debts included in it will be written off (‘discharged’) and you won’t have to pay them.
What are the consequences of a Debt Relief Order?
A DRO will impact your credit record for a period of six years. This is because your credit report looks back over the past six years of your borrowing history. A DRO will therefore impact future credit applications. When you apply for credit, companies look at your credit information to decide whether to lend to you.
What debts are not included in a Debt Relief Order?
Debts that are excluded from a DRO include:
- All student loans (old and new styles)
- Debts to the Child Maintenance Service.
- Social fund loans.
- Criminal fines (including debt incurred under the Proceeds of Crime Act)
- Claims against you for damage or personal injury.
- TV Licence arrears.
Can I work if I have a DRO?
If you’re considering a Debt Relief Order, or DRO, you’re probably very concerned about your unsecured debts and don’t know how you could ever afford to repay them. Well, the truth is you could still qualify for a DRO even if you work part time, or full time.
Will a DRO affect my job?
A DRO should not affect your current job as your employee does not need to be informed. Furthermore, a DRO will not damage your job prospects unless you are intending to be the director of a company. Similar to bankruptcy, a DRO prevents you from being a company director as well as managing a business.
Will a debt relief order affect my job?
Can a DRO affect my job? DROs may affect some jobs if the employment contract specifies that you can’t be insolvent. This is most likely to be an issue in the finance and legal sectors, but other jobs may also be affected. In our experience this is not common.
Will a Debt Relief Order affect my job?
Can you work and have a DRO?
Will a DRO stop bailiffs?
payments to bailiffs, also called enforcement agents, who have taken control of your belongings through a controlled goods agreement. Having a DRO won’t stop them from taking your belongings and selling them, so if you want to keep them you will have to keep paying the debt.
Can you have a bank account with a DRO?
A DRO should not affect your bank account. If your account has been frozen after applying for a DRO, you must first contact your bank for answers. Generally speaking, If you get a DRO, it will be up to your bank or building society to decide whether to freeze the account or not.
What happens after 12 months of a debt relief order?
The 12 months of the DRO are known as the ‘moratorium’. During this time you don’t make any payments towards the debts included in your DRO and your creditors can’t chase you for them. Once the 12 months are over, if your situation hasn’t improved, the debts included in the debt relief order are written off.
Can you rent with a Debt Relief Order?
If you’re behind on your rent, your landlord can still take action to evict you, even if the rent arrears are included in your DRO. This means you may have to continue paying these after a DRO is made.