Debt relief orders and debt management plans

Such is the state of personal debt, alternative forms of personal insolvency beyond bankruptcy and individual voluntary arrangements (IVAs) have emerged. They can be a formal route, where the use of the court and a licensed insolvency practitioner or the official receiver (OR) is required, or more non-formal/unregulated procedures.

Debt Relief Orders

DROs are dealt with under sections 251A to 251X of the Insolvency Act 1986 (IA 1986). This regime is an alternative to bankruptcy. The detailed procedure is set out in the Insolvency (England and Wales) Rules 2016, SI 2016/1024, Pt 9.

DROs are aimed at those with little or no income or assets and are a cheaper alternative to bankruptcy. There is a minimal one-off fee and the orders are obtainable via an application to the OR through an approved intermediary (a person approved by a competent authority) and without the need for court proceedings. Once obtained, a moratorium prevents any enforcement proceedings in respect of debts specified in the DRO for a period of one year (subject to any extension), during which time the debtor is subject to

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