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GLOSSARY

Debt relief order definition

What does Debt relief order mean?

A recently introduced non-court based alternative to bankruptcy and an individual voluntary arrangement for insolvent individuals that is primarily aimed at individuals who cannot afford the fees associated with those procedures.

Debt relief orders are only available to individuals who owe a low level of debt and who have virtually no assets or disposable income. Such orders are made by the official receiver upon the application of a debtor through an approved intermediary, rather than by the court.

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Debt relief orders (DROs)

What is a DRO?DROs are 'a new and simplified way of wiping the slate clean for debtors who are too poor to go bankrupt'.A DRO is made in respect of qualifying debts.A qualifying debt means a debt which is:•for a liquidated sum payable either immediately or at some future time•not secured•not an excluded debtUnder Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 9.2, an excluded debt means:•any fine or obligation arising under an order made in family proceedings or a maintenance assessment or maintenance calculation made under the Child Support Act 1991•any obligation arising under a criminal confiscation order•student loans•damages in respect of the death of or personal injury to any person•a crisis loan or budgeting loan made under the Social Security Contributions and Benefits Act 1992 (SSCBA 1992)Who may apply?An applicant for a DRO must:•be unable to pay their debts•be domiciled in England or Wales on the application date, or at some time in the last three years have been ordinarily resident, had a place of...

Debt management and relief for individual debtors

IntroductionPart 5 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007) introduced new regimes for debt management and relief, although not all of them have been implemented. While these regimes are aimed at enabling individuals to manage their debt more effectively, there are clearly implications for creditors seeking to enforce judgments against such individuals.•by amendment to the County Courts Act 1984, TCEA 2007, s 106 introduced a new form of administration procedure for debtors who do not have any business debts and whose income exceeds the amount required to meet their reasonable needs. TCEA 2007, s 106 has yet to be implemented•by amendment to the County Courts Act 1984, TCEA 2007, s 107 introduced a provision for a debtor suffering from a ‘sudden and unforeseen deterioration in their financial circumstances’ to apply for an enforcement restriction order (ERO). TCEA 2007, s 107 has yet to be implemented•by amendment to the Insolvency Act 1986 (IA 1986), TCEA 2007, s 108 introduced debt relief orders (DROs) as an alternative to bankruptcy...

Discover our 6 Practice Notes on Debt relief order

Representations and events of default plug-in clauses for loan agreements and security documentation: individual borrower or chargor

Representations and events of default plug-in clauses for loan agreements and security documentation: individual borrower or chargor DEFINITIONS The following definition needs to be added to Clause 1.1 (Definitions) of Precedent: Facility agreement (term loan): single company borrower—bilateral—with or without security or a guarantee. Mental Incapacity • means in relation to a person: (a) any unsoundness of mind—they are unable to make a decision for themselves in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain whether the impairment or disturbance is permanent or temporary; (b) any order being made or receiver appointed under the Mental Health Act 1983, the Mental Health Act 2007 or any analogous step or procedure being taken in any other jurisdiction; or (c) any step or procedure being taken in any jurisdiction which would restrict the capacity of the Borrower to enter into [this Agreement OR the Finance Documents to which they are a party] or would require the approval...

Why make an LPA?—client guide

Why make an LPA?—client guide This document provides general guidance about lasting powers of attorney (LPAs), explaining what they are, the benefits of making one and the process for creating and registering an LPA. Your Private Client lawyer will be able to provide specific advice based on your circumstances. What is an LPA? An LPA is a legal document that enables you to appoint one or more trusted people (known as attorneys or donees) to manage your affairs and make decisions on your behalf in the event that you lose mental capacity. There are two types of LPA: • LPA for property and financial affairs decisions This type of LPA allows you to appoint one or more attorney(s) to make decisions about your property and financial affairs including operating bank and building society accounts, the buying and selling of your house and other assets, dealing with your tax affairs, claiming and receiving benefits and pension payments, and paying household, care and other bills. • LPA for health and welfare...

Dive into our 2 Precedents related to Debt relief order

Restructuring and Insolvency weekly highlights—22 May 2025

This week's edition of Restructuring and Insolvency weekly highlights includes: the publication by the Insolvency Service of its monthly insolvency statistics for April 2025, a discussion of the Court of Appeal’s dismissal of appeals against the High Court’s decision to sanction Thames Water’s restructuring plan (Kington v Thames Water), an examination of the availability of proprietary injunctions in antecedent transaction claims in insolvency proceedings (Khan v Goldfarb), plus a round-up of other news and cases for restructuring and insolvency professionals.

Insolvency Service publishes monthly insolvency statistics for April 2025

The Insolvency Service has published its monthly insolvency statistics for April 2025 on company and individual insolvencies in England and Wales. The data illustrates that there were 2,053 company insolvencies, 3% higher than in March 2025 and 5% lower than the same month in 2024. For individuals, the total number of insolvencies in April 2025 was 10,012, 8% higher than in March 2025 and 4% higher than April 2024.

Read the latest 5 News articles on Debt relief order

[251R Fraudulent dealing with property obtained on credit]

[(1) A person in respect of whom a debt relief order is made is guilty of an offence if during the relevant period he disposed of any property which he had obtained on credit and, at the time he disposed of it, had not paid for it.(2) Any other person is guilty of an offence if during the relevant period he acquired or received property from a person in respect of whom a debt relief order was made (the “debtor”) knowing or believing—(a) that the debtor owed money in respect

Debt relief order is referenced 1 in UK Parliament Acts