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Debt Relief Order
Upon hearing the words bankrupt and bankruptcy, the first reaction of most people is to cringe. True enough, being one step close to filing for bankruptcy is not a very pleasant situation to be in. It pretty much means that you do not have the means to pay off your debts any more, and may indicate that you have problems paying for your monthly essentials. But the one thing that you need to keep in mind prior to filing for bankruptcy is that there are alternatives that you can consider.
In fact, it is a must to exhaust all the options out there because filing for bankruptcy should be your last resort. Once you decide to file for bankruptcy, it will stay on your credit record for seven to ten years, it will greatly harm your purchasing power as a consumer, and it will negatively impact your finances as well as your life in general.
Debt Relief Order: The Basics
In the United Kingdom, one such option that you can consider when you are seriously considering filing for bankruptcy is a debt relief order (DRO). This is part of the Tribunals, Courts and Enforcement Act of 2007 wherein debt relief is given to people in England and Wales. Those who are qualified for a debt relief order should owe relatively little money, have almost no disposable income or assets to pay off their debts, and not be able to afford to file for bankruptcy either. As ironic as it may sound, filing for bankruptcy will still cost you even if you are legally declaring that you are unable to pay off your debts. If this is the case, then you are qualified to apply for a debt relief order.
Now, just like any other financial solution, there are a few criteria that you should meet before you can file for a debt relief order. Take a look at the following list:
- If you have no means to pay off your debts, you can be eligible to file for the DRO.
- If you owe a minimal amount which does not exceed £15,000 and it does not include any non-liquidated debts, then you may qualify for a debt relief order.
- Your total gross assets should not exceed £300 and your disposable income should not exceed £50 a month.
- At the time of applying for a DRO, you should not have any undischarged bankruptcy order, Individual Voluntary Agreement, bankruptcy restrictions order or an interim order.
- As mentioned earlier, the DRO is applicable only for residents of England or Wales. Those who have been a resident of England or Wales, or have been carrying on their business here are also qualified to apply for the DRO.
How To Apply For A Debt Relief Order
The good thing about applying for a DRO is that it can easily be done online. As long as you are working with an approved intermediary, the process of applying for this debt relief order is quite hassle-free. However, there is a fee that needs to be paid which is non-refundable whether your application gets approved or rejected. As such, it is important to fill out the online application form correctly and completely prior to submission.
What Does A Debt Relief Order Do?
Once a DRO is in place, you as a debtor will be protected from any action taken by your creditors. Typically, the DRO will be implemented within the next twelve months after the application is approved, upon which you will be free from the debts included in the agreement. During this point, you are also obliged to provide information to, and cooperate with, the approved intermediary. In the same vein, you are expected to make arrangements to repay your creditors in case your financial circumstances improve in the future.
A Final Word about DROs
To sum it all up, a debt relief order is an excellent financial solution for those who are dealing with debt, and have a very low income. This is a perfectly normal situation to be in because many people go through financial difficulties at one point or another in their lives. As long as you meet the conditions under the debt relief order, then you should definitely consider it as a viable alternative to filing for bankruptcy.
UK residents can apply for debt help now using the online form at the bottom of this page. Alternatively, view the list of recommended UK debt management companies.
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You can apply for a debt management plan, IVA, Trust Deed or consolidation loan through our approved debt advisor, 123 Debt Solutions. You will be contacted by An advisor to go through your situation.
Only Submit This Form If You Are A UK Resident
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