What to Do If Your Debt Relief Order Application Is Refused

Why DRO applications are refused

The Official Receiver can only approve a DRO where every eligibility condition is met at the date of application. Most refusals come down to one of these.

A limit is exceeded

Qualifying debts of £50,000 or more, spare income of £75 a month or more, or assets worth £2,000 or more. A vehicle worth £4,000 or more counts towards the asset figure unless it is adapted for a disability.

An interest in property

Owning or part-owning a home or any other property, in the UK or abroad, rules out a DRO even where there is no equity. See DROs and homeownership.

Transactions in the last two years

Paying one creditor ahead of others, or selling or giving away something for less than it was worth, can lead to refusal.

Inaccurate or incomplete information

An account, debt or asset left out, or figures that do not match what the Official Receiver finds. Creditors can also object, for example if they believe you have undisclosed income.

Previous insolvency or no connection to England and Wales

A DRO within the last six years, current bankruptcy, an IVA, an interim order or a pending bankruptcy petition all bar a new order. You must also have lived or worked in England or Wales within the last three years. The full list is on our DRO requirements page.

What you will be told

A refusal comes in writing to you and to the approved intermediary who submitted the application. It states which condition was not met and, where relevant, the information behind that conclusion, such as a creditor's balance or a Land Registry entry. If the problem was missing information, the Official Receiver will often ask for it before deciding, so respond quickly.

Read the letter carefully with your adviser. The precise reason decides everything that follows: whether a reapplication is realistic, whether a review is worthwhile, and which alternatives make sense.

Can you apply again?

Yes, provided the reason for refusal has been resolved and you meet every criterion at the date of the new application. There is no fee, so reapplying costs nothing but time. A second application often succeeds where:

• A debt balance was wrong and the corrected total is under £50,000.
• Spare income was just over £75 and a fresh Standard Financial Statement, with all reasonable expenses included, brings it under.
• A vehicle has been correctly valued or replaced with one worth under £4,000.
• A missing document has now been provided.
• A transaction in the last two years has been explained to the Official Receiver's satisfaction.

Your adviser will tell you honestly whether reapplying is sensible. If the reason is a property interest or a DRO within the last six years, a new application will fail for the same reason. Our application checklist can help you make sure the second attempt is complete.

Asking for the decision to be looked at again

If you believe the refusal is wrong, you can ask the Official Receiver to reconsider. This is usually done through your adviser, who sets out why the decision is mistaken and provides supporting evidence. That might be a corrected creditor balance or proof that an asset is worth less than assumed.

If the Official Receiver maintains the refusal, you can apply to the court to have the decision reviewed. An adviser or a free legal service can tell you whether the case is strong enough. There are time limits for these steps, so contact your adviser as soon as the refusal letter arrives.

If you are just over the £50,000 limit

Interest and charges added since you last checked can push a total that looked safe over the limit. If this is the reason, an adviser has several options before giving up on a DRO.

1. Check every balance

   Debts sold to collectors are sometimes listed twice, under the original lender and the buyer. Statute-barred debts can also inflate the total. Settlement figures from each creditor may be lower than old statements show.

2. Confirm which debts are excluded

   Excluded debts such as court fines, child maintenance and student loans do not count towards the £50,000 limit. Our guide to debts not included in a DRO lists them.

3. Consider bankruptcy

   If the total is genuinely above the limit, bankruptcy has no debt ceiling and usually ends after 12 months. The fee is £680. See our comparison of a DRO and bankruptcy.

Paying debts down to get under the limit is rarely practical. Paying one creditor ahead of others to do so could itself be treated as a preference, so let your adviser lead.

Alternatives to a DRO

A refused DRO does not mean there is no solution. Depending on the reason, your adviser may suggest one of the following.

• Bankruptcy, for debts over £50,000 or where you own property with little or no equity, accepting that assets of value can be sold.
• An Individual Voluntary Arrangement (IVA), where you have enough reliable surplus income to make monthly payments over five or six years. See DRO vs IVA.
• A Debt Management Plan (DMP), an informal arrangement run free by charities such as StepChange, where spare income is over £75 but not enough for an IVA. See DRO vs debt management plan.
• Token payments, where you pay each creditor a small amount while you wait to fall inside the DRO criteria.
• Breathing Space, which gives 60 days of protection from creditor action while a new solution is put in place.

The compare debt solutions hub sets these side by side.

Staying protected in the meantime

Once a DRO application is refused, creditors are free to pursue the debts again. To keep things stable while you decide what to do next:

• Ask your adviser about Breathing Space straight away if any creditor is threatening court action or enforcement.
• Keep paying priority bills: rent, council tax, energy, court fines and child maintenance.
• Tell creditors, or let your adviser tell them, that you are getting debt advice. Many will hold action for a short period.
• Do not take out new credit to cope, and do not pay a fee-charging firm to "appeal" or "reapply" for you. Everything on this page is free through an approved intermediary.