A DRO, or Debt Relief Order, is an insolvency option in England and Wales for people with relatively low debt, little spare income and few assets. It freezes the debts covered, and they are written off if circumstances stay the same after twelve months.
In one line: A DRO freezes qualifying debts for twelve months and writes them off if your situation has not improved.
How a DRO works
A DRO is applied for through an approved debt adviser who checks the qualifying limits. Since April 2024 there is no application fee, and the debt ceiling was raised to 50,000 GBP in June 2024 (GOV.UK).
Someone owing 18,000 GBP with no spare income and minimal assets may qualify. During the twelve-month order the listed debts are frozen, and creditors cannot pursue them without permission.
If the person's circumstances have not improved when the order ends, the covered debts are written off. The DRO stays on the public register and credit file for six years.
DRO vs bankruptcy vs IVA
A DRO is aimed at low debts, low income and few assets, and is cheaper and simpler than bankruptcy. Bankruptcy has no debt limit, while an IVA repays part of the debt over several years.
Eligibility for a DRO depends on staying within set limits on debt, spare income and asset value, so someone who owns a property or earns more usually looks at other routes.
Primary source: GOV.UK: Debt Relief Orders