Debt Relief Order (DRO)
A debt relief order (DRO) is a way of having your debts written off if you have low debt with little assets. If you have less than £50.00 in surplus income per month a DRO can be a cheaper alternative to bankruptcy
Pros of a DRO
- Alternative to bankruptcy
- Don’t have to pay anything for 12 months
- Debt written off after 12 months
- Protects from creditors during the 12 month
- Formal Solution without court appearance
Cons of a DRO
- Can only apply of you owe less than £20,000 (England and Wales) £15,000 (Northern Ireland
- Cannot have a car worth more than £1000
- Your details will be recorded on the public register.
- You may need to pay the insolvency service a fee if you qualify
- Your credit file will be affected
A DRO will cost £90. This is the amount charged by the Insolvency Service to process a DRO application.
For more information on Debt Relief Orders in England, Wales and Northern Ireland, click HERE
Debt Arrangement Schemes (DAS) – This is for Scotland only
A debt arrangement scheme (DAS) is a way management your personal debts which is available to residents of Scotland by the Scottish government.
Pros of a DAS
- Legal protection from your creditors which includes your home
- Prevents legal recovery
- Stopes future interest and charges from the date of approval and fully waived when your DAS is completed.
- Flexible to your circumstance which can be changed
Cons of a DAS
- Your debt will need to be fully repaid which can extend the term
- Credit rating will be effected
- Interest may be re-added to the debts if you fail to complete your DAS scheme
- You cannot use further credit without approval from a DAS administrator
For more information on Debt Arrangement Scheme in Scotland, click HERE