A Debt Relief Order writes off qualifying debts after 12 months. There is no fee, no court hearing and no payments towards included debts, and listed creditors cannot take action against you.

The disadvantages are a six-year credit file entry, a public register entry, restrictions on borrowing and running a company, and excluded debts that stay payable. The order can also be revoked if your income or assets rise. An approved debt adviser must assess you and consider the alternatives.

DRO pros and cons at a glance

Advantages

  • Included debts are discharged after 12 months if nothing changes.
  • No application fee since 6 April 2024, and free advice.
  • No payments towards included debts; interest and charges frozen.
  • Listed creditors cannot take enforcement action without the court's permission.
  • No court hearing; the process runs through your adviser and the Official Receiver.
  • Shorter and simpler than an IVA, and cheaper than bankruptcy.
  • You keep ordinary household goods, work tools and one vehicle under £4,000.

Disadvantages

  • Recorded on your credit file for six years from approval.
  • Your name appears on the public Individual Insolvency Register until three months after the order ends.
  • Legal restrictions during the DRO, including on borrowing £500 or more and acting as a company director.
  • Not all debts are covered; student loans, child maintenance, court fines and secured debts remain payable.
  • Can be revoked if your income or assets rise or if the application was inaccurate.
  • Strict eligibility: no property, under £75 spare income, under £2,000 in assets.
  • Your bank account may be frozen or closed if you owe the bank money.

The main advantages of a DRO

Together, the benefits add up to a fresh start at no cost.

Debts are written off

At the end of the 12-month period, unless the order has been revoked, every qualifying debt included in it is cancelled.

It costs nothing

Since the £90 fee was abolished on 6 April 2024 there is no charge at any stage, and advice is free. Bankruptcy costs £680 by comparison. See DRO costs.

Payments stop and creditors are held off

From the day the order is made you stop paying included debts, and interest and charges are frozen. Listed creditors cannot take court or enforcement action without the court's permission.

No court and no newspaper notice

The Official Receiver decides on the paperwork alone. You do not attend court and, unlike bankruptcy, a DRO is not advertised in The Gazette.

Short, simple and you keep what you need

A DRO is short and decided by a single body, unlike an IVA, which typically runs for five or six years. Ordinary furniture, appliances, clothing, work tools and one vehicle worth under £4,000 are disregarded, so nothing is normally sold.

The main disadvantages of a DRO

The drawbacks last well beyond the 12 months.

Six years on your credit file

The credit reference agencies record the DRO for six years from the approval date. Mainstream lenders are likely to decline you during that time, and any credit you can get will cost more. See DRO and your credit score.

A public register entry

Your name, address and the date of the order are listed on the Individual Insolvency Register, which anyone can search online. The entry stays from approval until three months after the DRO ends.

Legal restrictions

During the order you must not borrow £500 or more without disclosing the DRO, and you must tell banks about it when opening an account. You must not act as a company director or help run a company without the court's permission, or trade under a different name without telling the people you deal with. Breaking these rules is a criminal offence. See the restrictions page and DRO and employment.

Some debts are not covered

Student loans, child maintenance arrears, court fines, criminal confiscation orders, Social Fund loans and debts secured on property or goods cannot be included and must still be paid. Debts arising from fraud can be listed but are not discharged. See debts not included in a DRO.

The order can be revoked

A DRO depends on your circumstances staying broadly the same for a year. If your spare income rises to £75 a month or more, or you receive a windfall or lump sum, the order can be revoked. The same applies if the application turns out to be inaccurate. The debts then come back with interest. Our guide to what happens if your circumstances change explains the duty to report.

Strict eligibility and bank account disruption

Many people who would benefit are excluded by owning property or having a little too much spare income. A bank you owe money to may also freeze or close your account, so many people open a basic bank account beforehand.

Who a DRO suits

Advisers generally find a DRO the best fit for people who rent or live with family and have no property anywhere. They owe less than £50,000 and have less than £75 a month spare. They have no savings or valuables beyond household goods and perhaps a modest car. They expect their situation to stay much the same for a year and do not run a limited company.

For this group the disadvantages are usually outweighed by the clean slate. The eligibility criteria and the eligibility checker are the next places to look.

Who should consider something else

An adviser will say where another route fits better than a DRO.

Homeowners, or people owing £50,000 or more

Both are excluded from a DRO. Bankruptcy has no debt limit and is open to homeowners, although a home with equity may be sold. It costs £680 and usually ends in discharge after 12 months.

People with £75 a month or more to spare

If you can afford meaningful monthly payments, an IVA lets you repay part of what you owe over five or six years, with the rest written off at the end. It is longer, involves insolvency practitioner fees taken from your payments, and needs the agreement of creditors holding 75 per cent of the voting debt.

People whose situation is temporary or improving

If you expect your income to recover, a debt management plan may be preferable. It is informal, free from charities and writes nothing off, but it carries no insolvency record or restrictions. Breathing Space can give 60 days of protection while you decide. Where debts total under £5,000 and there is a CCJ, an administration order is also worth asking about.

How to decide

The real question is whether, given your debts, income, housing and plans, the fresh start is worth the six-year record and the restrictions. An approved intermediary must consider all your options, and the advice is free. If a DRO still looks like the best fit, how to apply explains what happens next.

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