So, this fact sheet defines you when a debt relief order might be a great solution for you for dealing with your debts. A Debt Relief Order prevents most lenders from taking further steps against you & can aid you to get a good start. The main law about Debt Relief Orders can be pretty complicated, however this fact sheet teels what you require to know step by step.
Use this fact sheet to:
Let’s explore if you qualify for a Debt Relief Order & how long does a debt relief order take to process to help you deal with your debts;
Check out which debts can be incorporated in a Debt Relief Order; &
understand the influences of a DRO on you.
The fact sheet incorporates certain important contacts and links for you in order to get further assistance.
How to apply for a DRO
Si this fact sheet tells each and every rule that the Insolvency Service has about applying for the Debt Relief Order. So, if you apply for a Debt Relief Order through the National Debtline, then there are certain different rules about some parts of the application process. So, where there are differences, we’ve defined them in this fact sheet.
So, simply only apply for a DRO through a professional adviser named an ‘approved intermediary’. This is not possible to opt for the Insolvency Service yourself. You have to get advice from an approved intermediary in the very first stage, & if you find that they agree that a Debt Relief Order is the best choice for you, then they’ll give you advice & make the entire application on your behalf.
So, applications are forwarded to the official receiver’s office via an online system. So, the official receiver would be a government official who can deal with your application. Well, there aren’t any sorts of court hearings. Let’s check out the section How we can assist or get in touch with us for advice.
Do I qualify for a DRO?
Well, there are a number of strict rules that you need to meet in order to qualify for a Debt Relief Order. You must:
- Not be able to pay your debts;
- Have a debts of £30,000 or less at the date the application is agreed by the official receiver;
- Have property or assets worth a total of £2,000 or less;
- Not have a motorbike or car worth £2,000 or more;
- Have £75 a month or less spare earning after regular household expenses are taken into consideration;
- Stay in Wales, England (or have stayed or run a business in England or Wales for at least 3 years); &
- Not have had a Debt Relief Order in the last 5 to 6 years (although you might still qualify if your Debt Relief Order gets canceled due to certain reasons).
Joint applications
You are not able to apply for a DRO jointly with another person. Well if you & your partner both require a DRO, you each need to apply for this separately. It means you each need to pay an application fee.
When you can’t go for the DRO?
So, if you’re declared bankrupt or have any sorts of debt solutions like individual voluntary arrangement (IVA), then you’ll not be able to opt for the Debt Relief Order. Contact us for advice.
How can professionals assist?
Well, if you qualify for a Debt Relief Order, the professional DRO team will assist you in how to apply for a DRO. A financial adviser will verify that you meet all the criteria & send you a form. Moreover they will also give you a hold action letter that you can forward to your lenders (the people you borrow money to).
It will allow them to understand that you are opting for a DRO. You can check out the sample letter Hold action when you are going to apply for a DRO. Before sending it to your lenders, make sure you have all the required information
This may take a number of weeks to help you with your DRO application. But, it can change from time to time. Get in touch with a reliable form for information about how to apply for a DRO along with how long it is likely to take at the time you’re considering opting for a Debt Relief Order. Moreover, the Insolvency Service has certain strict rules and regulations about your whole debt being £30,000 or less while considering your application. And for these reasons, the reliable companies have decided to develop certain safeguards for our clients. And these safeguards try to ensure that once they begin a Debt Relief Order application with you, the debts don’t rise more than the Insolvency Service’s £30,000 limit before the application procedure gets completely finished. Thue, if you are already decide to go for a DRO through a reliable debt management company, you’ll require to be sure that:
- your debts are below £29,000 at the time you finish your DRO application pack; &
- you pay the 90 pounds fees.
Debts that are incorporated
You can incorporate the majority types of debt in your application as long as your whole debts are not more than £l30,000 pounds.
Priority debts
You must incorporate priority debts. The eamples include:
- rent arrears;
- electricity & gas debts with your recent supplier;
- arrears on the phone bill if you require in order to keep it as a necessary service;
- business rates, council tax, along with the community charge arrears; &
- VAT, income tax, & National Insurance arrears.
Priority debts
When you’re working out how much you borrow, you need to ensure that you include all the arrears you have on the priority debts. You’ll be required to pay your ongoing energy bills, rent, council tax bills & so on as normal.
Credit debts
You need to be sure you incorporate all the credit debts in that DRO application. So, if you leave a debt out, this can’t be involved later.**.
Examples of debts you must incorporate are:
- credit cards and store cards
- water arrears;;
- bank overdrafts and bank loans;
- catalogues;
- benefit overpayments;
- home-collected credit;
- loans to finance companies;
- personal or family debts;
- hire purchase & conditional sale agreements if you’re in arrears;
- parking penalty charges;
- hire agreements; and
- mortgage shortfalls (the money you borrow if your home was sold for less than the remaining mortgage).
You might also borrow debts from a very small business like
- money owed to employees;
- debts to clients who have paid for services or goods that were not able to be supplied; &
- debts to suppliers.
Popular Post: How long does an IVA stay on your credit file ?
Major Benefit overpayments
The major benefit overpayments can’t be recovered by any kind of method, involving reductions from the ongoing benefits, if they’re involved in a Debt Relief Order.
Debts to involve
Well, if you aren’t sure what debts you may incorporate in the Debt Relief Order application, get in touch with the professional advisor for advice regarding how to apply for a DRO
Excluded debts
Certain debts don’t count towards the £30,000, although you are still required to list them in the Debt Relief Order application. It means you’re still responsible for paying these debts in full. You can’t incorporate:
- magistrates’ court fines;
- Child Support Agency, maintenance along with the Child Maintenance Service (CMS)
- student loans;
- payments & arrears;
- crisis loans &budgeting loans;
- money borrowed under a ‘criminal confiscation order’; &
- debts resulting from any kind of personal injury claims against you.
- You’ll be required to assure you pay ongoing payments on these debts & incorporate them in your expenses.
That’s all Fact sheet tells you when a debt relief order (DRO)! For more information regarding how to apply for a dro or anything related let us know in the comment section!
