Debt relief orders (DROs)

Produced in partnership with Simon Passfield of Guildhall Chambers
Practice notes

Debt relief orders (DROs)

Produced in partnership with Simon Passfield of Guildhall Chambers

Practice notes
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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:

  1. for a liquidated sum payable either immediately or at some future time

  2. not secured

  3. not an excluded debt

Under Insolvency (England and Wales) Rules 2016 (IR 2016), SI 2016/1024, r 9.2, an excluded debt means:

  1. 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

  2. any obligation arising under a criminal confiscation order

  3. student loans

  4. damages in respect of the death of or personal injury to any person

  5. 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:

  1. be unable to pay their debts

  2. be domiciled in

Simon Passfield
Simon Passfield chambers

Simon is a specialist insolvency barrister who undertakes litigation and advisory work in all aspects of corporate and personal insolvency law. He has been consistently recognised as a leading junior in this field by Chambers and Partners and Legal 500 and has appeared in a number of reported insolvency cases.

In the last year, Simon has been involved in the leading cases concerning the effect of bankruptcy on pension rights (Horton v Henry [2015] 1 WLR 2488; Re X (Application for Income Payments Order) [2014] BPIR 1081), has acted for a trustee in bankruptcy in a variety of applications in a complex multi-million pound bankruptcy involving the concealment and disposal of assets by a serially non-cooperative bankrupt (Wood v Lowe [2015] EWHC 2634 (Ch)), has acted successfully for majority creditors in seeking to remove liquidators in a multi-million pound, multi-jurisdictional liquidation (Re Overfinch Bespoke Vehicles Limited), has acted successfully for a liquidator in a claim against a Premier League football club (Events Management Catering Ltd v Hull City Tigers Ltd), has obtained freezing injunctions against the former directors of a company in liquidation (Re Lim’s Fish and Chips Limited) and secured a suspended committal order against a misfeasant bankrupt (Re Hinchliffe).

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Jurisdiction(s):
United Kingdom
Key definition:
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.

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