Debt Relief Order Requirements and Rules

The DRO requirements at a glance

The table lists every requirement in one place. The first four are the financial limits and the rest are the legal conditions this page explains in turn. Your adviser checks each one, because the Official Receiver cannot overlook a failed condition.

Do you need to live in England or Wales?

You must have a connection to England or Wales. The test is met if you are domiciled here at the date of application. It is also met if, at any time in the last three years, you lived here, had a home here or carried on business here.

So a recent move abroad, or to Scotland or Northern Ireland, does not rule you out. Scotland has its own Minimal Asset Process and Northern Ireland runs a separate DRO scheme. People whose only connection is to those nations should look there instead. Your adviser will usually ask for proof of address history, such as tenancy agreements or payslips.

Previous bankruptcy, IVAs and DROs

A DRO cannot run alongside another formal insolvency procedure. The Official Receiver must refuse the application if, on the day it is submitted, any of the following apply.

• You are an undischarged bankrupt.
• You are in an Individual Voluntary Arrangement (IVA).
• An interim order is in force.
• A bankruptcy petition against you is pending, unless the court has agreed the DRO can go ahead.
• You have had a DRO approved within the last six years.

A failing IVA must be ended properly before a DRO can be made. For a comparison of the routes, see DRO vs IVA and DRO vs bankruptcy.

The two-year look-back

The Official Receiver looks at what you did with your money and belongings in the two years before the application. Two kinds of transaction cause problems.

Preferences

A preference is paying off, or paying extra to, one creditor ahead of the others when you could not pay everyone. Clearing a loan from a relative while leaving credit cards unpaid is the classic example. Routine payments are not usually a problem.

Transactions at an undervalue

This means selling or giving away something for less than it was worth. Transferring a car to a relative for a token sum is one example. Handing over savings so that you fall below the £2,000 asset limit is another. Either can lead to refusal or revocation. Our preparation guide explains which records to gather for this period.

Honesty and full disclosure

When you apply, you must list every creditor and every debt, including those that will not be written off. You must also give an accurate picture of your income, spending, assets and recent transactions. The Official Receiver relies on your confirmation that this is true.

Leaving out a debt because you are embarrassed about it counts as a failure to disclose. So does understating a bank balance. Debts you deliberately leave out are not written off. If you are unsure whether something needs declaring, tell your adviser and let them decide.

Why you must apply through an approved intermediary

You cannot apply for a DRO yourself. The law requires the application to go through an approved intermediary, a debt adviser authorised to submit DRO applications to the Insolvency Service. Most work for free advice organisations such as Citizens Advice, StepChange or National Debtline. There is no fee, since the £90 charge was removed on 6 April 2024.

The intermediary must be satisfied that you meet every requirement and that a DRO suits you better than the alternatives. The how to apply page walks through what this involves.

Your duties during the 12 months

For the 12 months the DRO lasts you must do the following.

• Tell the Official Receiver about any change in your circumstances, such as a new job, a pay rise, an inheritance, a lump sum or a backdated benefit award.
• Co-operate with any request for information or documents.
• Keep paying rent, ongoing bills, council tax for the current year and any excluded debts.
• Follow the restrictions. Do not borrow £500 or more without disclosing the DRO. Do not act as a company director without court permission. Tell any bank about the DRO when opening an account.

The restrictions page lists each rule, and what if your circumstances change explains how reporting works.

What happens if you break the rules

The consequence depends on when the problem comes to light and how serious it is. Honest mistakes are treated differently from dishonesty, so if you realise something was missed, tell your adviser straight away.

Refusal

If a requirement is not met at the application stage, the Official Receiver refuses the order. You can reapply once the issue is resolved. See what to do if a DRO is refused.

Revocation

The Official Receiver can revoke the DRO during the 12 months if you did not qualify, gave inaccurate information or your finances improved beyond the limits. Creditors can object on the same grounds. Revocation means the debts become payable again in full.

Restrictions orders and prosecution

Where your conduct was dishonest or reckless, the Official Receiver can apply to the court for a Debt Relief Restrictions Order (DRRO). You can instead agree to a Debt Relief Restrictions Undertaking (DRRU). Both extend the restrictions for between 2 and 15 years and appear on the Individual Insolvency Register. Breaching the restrictions, concealing property or making false statements are criminal offences.