DRO eligibility criteria: can I get a debt relief order?

To apply for a debt relief order (DRO) you must meet certain criteria, such as not being a homeowner, not owning many valuables, and having £75 or less at the end of each month after covering your household expenses.

In this guide, we look at the DRO criteria in more detail, so you can check if you’re eligible.

What is a DRO?

A DRO can help if you can’t afford your debts. It lasts for 12 months and if your financial situation doesn’t improve in that time, your debts will be written off. During the 12-month period, your debts are frozen, so you don’t need to make payments.

A DRO will stay on your credit file for six years and during this time you might find it difficult to borrow money. A DRO may be revoked or rejected if you no longer meet the criteria or weren’t honest in your application.

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What are the DRO criteria?

You may be eligible for a DRO if you:

can’t afford to pay back your debts
owe less than £50,000
have £75 or less left over each month once you’ve covered essential household expenses
aren’t a homeowner
don’t have any assets or savings worth more than £2,000 combined – assets are possessions such as jewellery or antiques, not basic household items or tools that you need for your job
have a vehicle with a market value of £4,000 or less
haven’t had a DRO in the last six years – this may not apply if your DRO was revoked or cancelled but it’s best to ask a DRO adviser if you’re not sure
have lived or worked in England or Wales in the last three years
don’t have an IVA and aren’t going through bankruptcy

In the last two years, you must not have:

shown preferential treatment in paying your debts e.g. paying one creditor back with larger repayments while not meeting the minimum payments for another
sold property or assets for less than their market value

To apply for a DRO, you need to speak to an approved DRO adviser.

What if I have joint debts?

Joint debts are counted in the DRO limit, even if your partner or ex-partner is still making payments. A DRO may affect your partner if they’re unable to meet the monthly payments alone. If you’re accepted for a DRO, your partner or ex-partner will be liable for the full amount.

What if I have two vehicles?

If you own more than one vehicle, you may still be eligible for a DRO if:

your main vehicle has a market value of £4,000 or less, which meets the DRO vehicle limit.
you class your second vehicle as an asset in your DRO application. You can only do this if the market value is £2,000 or less and you’ve got no other assets that would exceed the £2,000 combined asset limit

Vehicles adapted to help you with a physical disability are exempt from the £4,000 vehicle cap. Speak to your DRO adviser if this applies to you.

What debts can be included in a DRO?

You can include non-priority debts in a DRO. They include:

credit cards
store cards
overdrafts
buy now pay later
money borrowed from friends and family
hire purchase agreements that aren’t for essential items (e.g. a games console)
unsecured loans (where you don’t use your home as security)
catalogues
water bill arrears

How do I apply for a DRO?

If you think you might be eligible for a DRO, you need to know:

how much income you receive – this includes employment, self-employment, benefits, pensions, insurance and contributions from other members of the house for household expenses
what your monthly outgoings are – this includes housing costs, travel expenses, food, housekeeping, household bills and utilities, such as Wi-Fi and TV

Your DRO adviser can help you create a monthly budget to see if you meet the £75 disposable income limit. A reasonable amount can be taken for household expenses.