New changes to debt relief orders

Major changes to debt relief orders (DRO) have taken effect as of today (28 June). 

Chancellor Jeremy Hunt, who announced the changes in March, said they will help thousands of people struggling to manage their debts.  

The first change came into force in April when the £90 administration fee you previously had to pay to apply for a DRO was scrapped.

Now more people will qualify for a DRO after more changes come into force.

What’s a DRO? 

A DRO lets you freeze your debts for 12 months. During this time, creditors aren’t allowed to chase you to pay.

If your situation doesn’t improve during the 12 months, your debts are written off.  

But there are two things to bear in mind before getting a DRO: 

• it will affect your credit rating for six years  

• if your situation improves during the 12 months, your DRO could end, meaning you’ll need to repay your debts. 

Who can get a DRO? 

You may be eligible for a DRO if you: 

• can’t pay your debts 

• don’t own a home 

• don’t have many assets 

• have very little spare money at the end of the month 

• haven’t had a DRO in the last six years 

What’s changing? 

There have been two big changes to the criteria needed to get DRO: 

Increase to maximum debt 

From now, the highest amount of debt you can have to get a DRO is £50,000. Before, you could only qualify if you owed no more than £30,000.  

Permitted car value doubles: 

Under the old rules, you couldn’t own a car worth more than £2,000 to be eligible for a DRO. That’s now changed to £4,000. 

Do you need debt help? 

If you’re in arrears, we’re here to help - whether you need help with budgeting, advice on applying to grants, or want to know what benefits you could be entitled to. 

We can advise you on debt solutions online, or you can give us a ring and we’ll talk you through solutions that could be suitable for you.  

All our advice is free and impartial. Some solutions are free, others have a fee.