DRO (Debt relief order)

After you’ve given us all the information we need, we’ll submit your DRO application. The Insolvency Service will make a decision within ten working days (two weeks). 

A debt relief order lasts for 12 months. This period is known as the ‘moratorium’. During that time, you don’t make any payments towards the debts included in your DRO and your creditors can’t chase you to pay.   

If your situation doesn’t improve during the 12 months, those debts are written off, meaning you don’t have to pay them back. 

For most people, a debt relief order shouldn’t affect your job. But if you work in finance or law, your employment contract may prevent you keeping your job if you become insolvent, and a DRO is a type of insolvency. Public service jobs, such as the army or police, may also be affected (although this is less common these days).

It’s a good idea to check your contract though, as it may depend on how long you’ve been in your role and whether you handle finances. There are also some professional or licensing bodies that won’t allow you to renew your membership if you’ve been made insolvent.  

You won’t be able to get a debt relief order if you have a mortgage, as you can’t get one if you’re a homeowner. Taking out a mortgage while you have a DRO won’t be an option either.   

A DRO usually lasts for 12 months. After that time, you could in theory get a mortgage. But a DRO stays on your credit file for 6 years from the date it was made. During this time, you will struggle to get a mortgage from a mainstream lender. It may be possible to get one from a lender who specialises in mortgages for people with a poor credit history, but these are likely to be an expensive option.   

If you want to take out a mortgage within the next six years, a DRO is probably not the right solution for you.

Once we have all the information we need, we’ll submit your DRO application. The Insolvency Service will make a decision within ten working days (two weeks).

During your DRO, a creditor is only allowed to take action against you under very limited circumstances.   

One set of circumstances where a creditor can continue action against you is if you’ve made a payment arrangement with a bailiff e.g. a controlled goods agreement. If you’ve made this sort of arrangement with a bailiff, your debt relief order won’t stop them from taking and selling your belongings. You’ll need to carry on making the payments you’ve agreed to if you want to keep your possessions.