A DRO wipes out your debts after 12 months. You pay nothing to get one.
Bottom line: A Debt Relief Order (DRO) is a way to have your debts written off after 12 months, with no monthly payments and no fee. You qualify if you owe under £50,000, have under £75 a month left after bills, and own under £2,000 of belongings and no vehicle worth £4,000 or more. You must apply through an approved debt adviser, such as Citizens Advice or National Debtline. It is for England, Wales and Northern Ireland, not Scotland.
Think of the letters that land on the mat every week, the ones you stopped opening in March. A DRO is the legal route that makes those letters stop. For the 12 months it runs, the creditors in it cannot chase you, sue you or send bailiffs. At the end, those debts are gone.
It sounds too good for the rules to be loose. They are not loose. You either meet every one of them or you do not, and that is why most of this page is about the rules.
Our free checker compares your situation with the DRO rules in about two minutes.
Check if you might qualifyDRO eligibility: the six rules, and what each one means in real life
| Rule | The limit | What it means |
|---|---|---|
| Total debts | Under £50,000 | Every debt you owe counts, and you cannot leave one out to scrape under the limit. Student loans are ignored. |
| Spare income | Under £75 a month | What is left after your normal bills and living costs, not what you currently pay your creditors. |
| Belongings | Under £2,000 | Second-hand value, as if you sold it on eBay. Ordinary household items and clothes are not counted. |
| Vehicle | Worth under £4,000 | A car or motorbike. A cheap older car is usually fine. |
| Where you live | England, Wales or Northern Ireland | You must have lived or worked there in the last 3 years. |
| Last DRO | None in the past 6 years | You cannot stack them. |
The one that trips people up is the £75. It is not asking what you could squeeze out of a tight budget. Your adviser works out a normal budget for your household, food, heating, transport, a little for Christmas and replacing a broken kettle, and whatever is left is your spare income. Many people are surprised by how much the budget allows. If your IVA quote was £150 a month, the same budget can still leave you under £75 on the DRO test.
What the 12 months actually look like
- Before the DRO: your adviser does the paperwork and sends the application to the Insolvency Service. This can take a few weeks. There is no court hearing and nobody visits you.
- Day one: the Official Receiver confirms the DRO. Keep that letter, it is your proof that the debts are included.
- During the 12 months: no payments, and creditors in the DRO cannot contact you to ask for money.
- If your situation changes: tell the Official Receiver. A new job, a bigger income or an inheritance can matter.
- At the end: the debts in the DRO are written off. There is no final test. You do not need to do anything.
Not sure a DRO is the right fit? Compare it with bankruptcy before you decide.
See your other options side by sideThe part nobody warns you about: windfalls
Say you are three months into a DRO and your aunt dies and leaves you £3,000. Or you get a back-dated benefit payment. Or your boss gives you a permanent pay rise. What now?
The rule is simple: tell the Official Receiver about money or property you receive, even if you think it is small. Lump sums over £2,000 can lead to the DRO being cancelled, which puts the debts back. Small, one-off amounts usually do not. Some payments are treated differently, for example back-pay for disability benefits such as PIP is usually seen as covering disability costs you already had. The honest answer is that it depends, so the cheap move is to ask your adviser before you spend it.
One thing worth knowing: according to the Debt Camel advice site, more than 45,000 DROs were made in 2024-25 and only around 200 were revoked. Cancellation is the exception, not the rule.
What a DRO does not cover
Most debts are included: credit cards, loans, overdrafts, catalogues, payday loans, council tax and utility arrears, and even benefit overpayments. A few are not. Student loans, court fines and child maintenance stay with you. If you are being chased by bailiffs for a court fine, a DRO will not stop that. Read our guide to your rights with debt collectors and bailiffs if you are not sure who has the right to do what.
If you only have a few hundred pounds of debts you could clear in a year, a DRO is probably overkill. If you are paying the minimum on cards and the balance is barely moving, our minimum payment trap calculator will show you how long that road really is.
What it costs you: your credit rating and mortgages
No money, but you do give something up. A DRO goes on your credit file for 6 years. Getting a mortgage or a contract phone gets harder, and you may pay more for credit. For 12 months you cannot borrow £500 or more without telling the lender, and you cannot be a company director. The DRO also appears on the public Individual Insolvency Register until 3 months after it ends. On your credit file it stays for 6 years from the day it was approved, so it drops off about 5 years after the DRO ends. Some lenders will still say no to a mortgage in that time, so ask a mortgage broker rather than applying to lots of lenders yourself, because each refusal can leave a mark.
Against that, if your debts are above what you could ever repay, six years of damaged credit with no debts is better than ten years of damaged credit with the debts still there. If you are worried, compare it with a debt management plan, which keeps you paying but protects your credit file less. Our UK debt help hub lists every option in one place.
How to apply
- Do not pay a company to apply. The application is free. Be wary of anyone who asks for a fee.
- Contact an approved adviser. Citizens Advice, StepChange and National Debtline can all help, and it is free.
- Gather every debt, every bill and your income. Include old council tax, parking tickets and tax debts, because you cannot add a debt later.
- Your adviser submits the application. If it is approved, the 12 months start.
See what you owe, what you could repay, and whether a DRO is even the right route.
Run your numbers firstQuestions people ask
Do I have to pay anything back in a DRO?
No. There are no monthly payments during the 12 months, and there is no application fee. The government removed the old £90 fee in April 2024. At the end of the 12 months the debts in the DRO are written off.
Can I get a DRO if I have a car?
Yes, as long as the car is worth less than £4,000. The rest of your belongings (excluding normal household items and clothes) must be worth under £2,000 in total, counted at second-hand value, what you could sell them for.
Can I get a DRO if I own my home?
In practice, no. A DRO is built for people who rent or live with family. If you own a property, or part of one, a debt adviser will usually point you towards an IVA, a debt management plan or bankruptcy instead.
What happens if I get a pay rise or a lump sum during the DRO?
Tell the Official Receiver, the person who runs the DRO. Getting more money does not automatically end the DRO, but a big lump sum or a permanent rise in income can lead them to cancel it. Debt Camel reports that only about 200 of more than 45,000 DROs in 2024-25 were revoked, so it is rare. Ask your adviser before you assume anything.
Can a DRO be cancelled?
Yes. The Official Receiver can cancel (the legal word is revoke) a DRO if you stop meeting the rules, for example if you come into a lump sum, or if you hide something. Breaking the restrictions can also get the DRO extended.
Will a DRO affect my job or my bank account?
Most jobs are unaffected, but you cannot be a company director while you are in a DRO without court permission. You should tell your bank when you open a new account, and you cannot borrow £500 or more without telling the lender you are in a DRO.
Does a DRO stop bailiffs and court action?
Yes. Once the DRO is made, creditors listed in it cannot demand payment, take you to court or send bailiffs for those debts. The exceptions are things a DRO does not cover, such as court fines and child maintenance.
Can I get a DRO if I live in Scotland?
No. DROs only exist in England, Wales and Northern Ireland. Scotland has a different route, the minimal asset process, which is part of bankruptcy there.
How long does a DRO stay on my credit file?
Six years from the date it starts. The DRO also sits on the public Individual Insolvency Register until 3 months after it ends.
Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd, which is not authorised or regulated by the Financial Conduct Authority (FCA). This article is general education, not financial or legal advice. For free, impartial debt advice, contact StepChange on 0800 138 1111 or National Debtline on 0808 808 4000.
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