Richard Long & Co
Debt Relief Order (DRO)
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A Debt Relief Order (DRO) is a way to deal with your debts if you:
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Owe less than £30,000 in total
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Do not have much spare income - usually less than £75 per month
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Do not own your own home
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If you have a DRO, you:
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Stop making payments towards your debts (including interest) for 12 months
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Need to follow certain rules ('restrictions') during that time
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will not need to pay the debts or follow restrictions after 12 months
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A DRO can be cancelled if your financial circumstances change. It can be extended if you do not follow the restrictions.
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You will still have to pay:
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Your rent and bills
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certain debts not included in the DRO, such as student loans or court fines
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There are restrictions on what you can do while you have a DRO , you cannot:
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Borrow more than £500 without telling the lender about your DRO
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Act as the director of a company
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create, manage or promote a company without the court's permission
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Manage a business without telling those you do business with about your DRO
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Open a bank account without telling the bank or building society about your DRO
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If the criteria are met, a DRO will be a low-cost alternative to bankruptcy.
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If you get a DRO:
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Your creditors cannot recover their money without the court's permission.
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You are usually discharged ('freed') from your debts after 12 months.
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You get a DRO from the Official Receiver (an officer of the bankruptcy court), but you must apply through an authorised debt adviser, who will help you fill in the paperwork.
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Further information, and a link to a list of authorised debtor advisers, can be found at www.gov.uk/options-for-dealing-with-your-debts/debt-relief-orders