The following Restructuring & Insolvency guidance note Produced in partnership with Simon Passfield of Guildhall Chambers provides comprehensive and up to date legal information covering:
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 an excluded debt
Under 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
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)
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 residence or carried on business in England or Wales
not be involved in another formal insolvency procedure at the time of the application
owe less than £20,000 (excluding unliquidated debts and excluded debts)
have monthly surplus income of £50 or less
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