A Debt Relief Order (DRO) is a legal way of dealing with debts you cannot repay. It is available in England and Wales, approved by the Insolvency Service and free to apply for. The debts included in it are frozen for 12 months. If your circumstances have not improved by then, those debts are written off.
To qualify you must owe less than £50,000 in qualifying debts and have less than £75 a month spare. Your assets must be worth less than £2,000 and you must not own property. An approved debt adviser assesses you and submits the application.
- £0Application fee since April 2024
- 12 monthsStandard DRO period
- < £50,000Qualifying debt limit
- 6 yearsTime on your credit file
DROs were introduced in 2009 as a simpler, cheaper alternative to bankruptcy. The order is made by the Official Receiver, an officer of the Insolvency Service, without a court hearing.
Who a DRO is designed for
A DRO suits people who are insolvent in the plain sense of the word. Their debts cannot be repaid within a reasonable time, and they have no realistic prospect of that changing.
The people who qualify tend to rent, live with family or be in temporary accommodation. They rely on benefits, a low wage, part-time work or a small pension. Their debts are things like credit cards, overdrafts, loans, catalogues, council tax or rent arrears.
How a DRO works in five steps
The process runs through your adviser and the Insolvency Service, not a court.
- An approved debt adviser, usually at a free organisation such as Citizens Advice, StepChange or National Debtline, assesses your finances and considers the alternatives with you.
- The adviser submits the application online to the Insolvency Service. It lists your creditors and sets out your income, spending and belongings.
- The Official Receiver reviews the application and can approve it, ask for more information or refuse it. Approval is not automatic, and a creditor can object.
- Once approved, the order takes effect straight away. Your creditors are told and must stop collection action. Your name is added to the Individual Insolvency Register.
- After 12 months, unless the order has been revoked, the listed debts are discharged. You no longer owe them and the restrictions end.
Our step-by-step explanation of how a DRO works covers each stage in more depth.
What happens to your debts during a DRO
The debts you include go into what is called a moratorium. For 12 months you make no payments towards them. Interest, fees and charges are frozen. Listed creditors cannot start court action, send bailiffs or pursue an attachment of earnings without the court's permission. They may still send statements, which is allowed.
Debts a DRO does not cover
Student loans, child maintenance, court fines, criminal confiscation orders, Social Fund loans and debts secured on your belongings are excluded and must still be paid. Rent, council tax and bills that fall due after the order starts must also be paid. Read more about which debts qualify and which debts are not included.
The main eligibility limits
All of these thresholds must be met on the date of the application.
| Criterion | Current rule |
|---|---|
| Qualifying debts | Less than £50,000 in total |
| Spare income | Less than £75 a month after reasonable household expenses |
| Assets | Savings and valuable belongings worth less than £2,000 |
| Vehicle | One vehicle worth less than £4,000 can usually be kept; vehicles adapted for a disability are disregarded |
| Property | You must not own, or have an interest in, a home or other property |
| Connection to England or Wales | You must have lived or worked in England or Wales within the last 3 years |
| Previous insolvency | Not currently bankrupt, in an IVA or subject to an interim order; no DRO in the last 6 years |
Each limit has its own details. Our eligibility guide explains every test, and the income and asset limits page shows how advisers work out spare income.
See how your own situation compares with these limits.
Use the eligibility checkerHow long a DRO lasts
A DRO normally lasts 12 months from the date it is approved. The Official Receiver can extend it in limited circumstances, usually to investigate a change in your circumstances. Your entry on the Individual Insolvency Register is removed three months after the order ends. The DRO stays on your credit file for six years from the approval date. See what happens after 12 months and how a DRO affects your credit score.
Restrictions while the order is in force
During the DRO you must follow a set of legal restrictions, and breaking them is a criminal offence. You must not borrow £500 or more, alone or jointly, without telling the lender about the order. You must tell any bank or building society about it when opening an account or asking for an overdraft. You must not act as a company director, or form, manage or promote a company, without the court's permission.
You also must not trade under a different name without telling the people you deal with, and you cannot apply for another DRO for six years. You must co-operate with the Official Receiver and report any improvement in your finances, such as a pay rise or an inheritance.
Dishonest or reckless behaviour can lead to a Debt Relief Restrictions Order (DRRO) lasting between two and 15 years. The restrictions guide explains each rule.
What a DRO costs
A DRO costs nothing. The £90 application fee was abolished in England and Wales on 6 April 2024, and advice from approved intermediaries is free. If a company offers to arrange a DRO for a fee, you do not need its help. Our DRO costs page covers the fee's removal and the indirect costs to plan for.
Is a DRO right for you?
For people who meet the limits, a DRO is often the simplest route to a fresh start. The six-year credit file entry can make renting or buying a car on finance harder. The restrictions matter to anyone who wants to run a company. And because the order can be revoked, it is a poor fit for someone expecting a big rise in income within the year.
The alternatives to compare
Bankruptcy has no debt limit and is open to homeowners, but it costs £680 and assets of value can be sold. An Individual Voluntary Arrangement (IVA) suits people with a reliable income who can repay part of what they owe over five or six years. A Debt Management Plan is informal and writes nothing off, but it keeps your options open. An approved debt adviser must consider all of these with you. Our advantages and disadvantages page sets out the trade-offs.
Before you rely on this page
Debt Relief Order is an independent educational website. We are not the Insolvency Service and we do not provide regulated debt advice. The figures on this page reflect official guidance at the time of our last check and can change. Always confirm your position with an approved debt adviser before making a decision.
Sources and further reading
- GOV.UK, Options for dealing with your debts: Debt Relief Orders
- GOV.UK / Insolvency Service, How to get a Debt Relief Order (DRO), updated 28 June 2024
- GOV.UK, Insolvency Service review of DRO reforms, July 2026
- National Debtline, Debt relief orders fact sheet (England and Wales)