Debt relief orders (DROs)
Produced in partnership with Simon Passfield
Debt relief orders (DROs)

The following Restructuring & Insolvency guidance note Produced in partnership with Simon Passfield provides comprehensive and up to date legal information covering:

  • Debt relief orders (DROs)
  • What is a DRO?
  • Who may apply?
  • The application
  • Duties of the debtor
  • Effect of a DRO
  • Objections to DRO
  • Revocation of DRO
  • Offences

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 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 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

  3. not be involved in another formal insolvency procedure at the time of the application

  4. owe less than £20,000 (excluding unliquidated debts and excluded debts)

  5. have monthly surplus income of £50 or less