How Does a Debt Relief Order Work?

The DRO lifecycle at a glance

The journey runs from your first adviser appointment to the day the order leaves your credit file. The period before the application is usually the longest part.

1. Before you apply

   Free advice and assessment

   An approved intermediary at a free advice organisation checks every criterion and builds a full picture of your finances.

2. Preparation

   Application prepared and checked

   You check that every creditor is listed and every figure is right, then confirm the information is true.

3. Submission

   Sent to the Insolvency Service

   The approved intermediary submits the application online.

4. Decision

   The Official Receiver decides

   The Official Receiver approves the application, asks for more information or refuses it. Approval is not automatic.

5. Months 1 to 12

   The moratorium

   Included debts are frozen. You follow the restrictions, pay ongoing bills and report changes.

6. End of month 12

   Discharge

   Unless the order has been revoked or extended, the included debts are discharged and the restrictions end.

7. 3 months after discharge

   Removed from the Insolvency Register

   Your entry on the public Individual Insolvency Register is removed.

8. 6 years after approval

   Credit file entry drops off

   The DRO leaves your credit reference files six years after the approval date.

Who is involved in a DRO

Four parties play a part in a DRO.

The approved intermediary

An approved intermediary is a debt adviser authorised to submit DRO applications. Most work for free advice organisations such as Citizens Advice, StepChange, National Debtline or a local advice agency. They assess your eligibility and prepare and submit the application. See how to find free debt advice.

The Insolvency Service and the Official Receiver

The Insolvency Service runs the DRO scheme. The Official Receiver is the officer within it who makes the order and administers it. You deal with the Official Receiver by correspondence. A court is only involved if someone applies to it about a specific issue.

Your creditors

Every listed creditor is told about the order once it is approved and must stop collection activity. A creditor can object to the Official Receiver if they believe you do not qualify.

Credit reference agencies

They record the DRO on your credit file for six years from approval. Included debts are usually marked as defaulted and later as satisfied. Our credit score guide explains more.

What the 12-month moratorium does

The moratorium is the formal name for the 12-month DRO period. You stop paying the included debts and creditors cannot demand payment. Interest, fees and charges stop accruing. Creditors cannot start or continue court proceedings, instruct bailiffs or apply for an attachment of earnings on those debts without the court's permission. They may still send statements.

The moratorium only covers debts that were listed and that qualify. Debts that cannot be included, such as student loans, child maintenance and court fines, continue as before. Bills that fall due after the order starts, such as rent, council tax and energy, must also be paid. For day-to-day life under the order, read what happens during a DRO.

Your duties during the DRO

You have legal duties during the order, and breaking the restrictions is a criminal offence. You must co-operate with the Official Receiver and answer any questions they raise. You must also report any change that might affect your eligibility, such as a pay rise, an inheritance or a lump sum.

You must not borrow £500 or more, alone or jointly, without telling the lender about the DRO. You must tell any bank or building society about it when opening an account or applying for an overdraft. You must not act as a company director, or form, manage or promote a company, without the court's permission. Trading under a different name without telling the people you deal with is also barred.

The restrictions page goes through each rule. Dishonest or reckless behaviour can lead to a Debt Relief Restrictions Order lasting between two and 15 years.

Can a DRO be cancelled or extended?

Yes. The Official Receiver can revoke a DRO at any point during the 12 months. The usual reasons are that your income or assets have risen above the limits, or that the application was inaccurate or incomplete. Failing to co-operate, or an upheld creditor objection, can also lead to revocation. If that happens, the moratorium ends and your creditors can pursue the debts again, with interest.

The Official Receiver can also extend the DRO period in limited circumstances, usually to investigate a possible breach or a change in your situation. An extension delays discharge but does not restart the six-year credit file clock. Our guide to what happens if your circumstances change explains what to report.

What discharge means

Discharge is the point at which the included debts are legally released. You no longer owe them, the creditors cannot ask you to pay, and the restrictions end on the same day. Keep the confirmation paperwork, as you may need it years later.

Discharge does not wipe your credit history clean. The DRO entry stays on your credit file until six years after approval, and defaults on the included debts remain for six years from their own default dates. Excluded debts are not discharged and must still be paid. See what happens after 12 months.

A short illustrative example

Imagine someone who rents a flat, works part time and claims Universal Credit. They owe £18,000 across two credit cards, a catalogue and an overdraft. After reasonable living costs they have about £40 a month left, with no savings, car or valuables.

An adviser confirms every limit is met using a Standard Financial Statement budget, and the application is approved. Six months in, their surplus rises to about £60. They report it, and the order continues because it is still below £75. At the end of the year the £18,000 is discharged. Had the surplus risen to £150, the order could have been revoked and another solution, such as a debt management plan, would have been needed.