What is a Debt Relief Order (DRO)?

A Debt Relief Order is a formal insolvency procedure administered by the Insolvency Service. It is legally binding and, unlike bankruptcy, carries no application fee. At the end of the 12-month DRO period, all qualifying debts are written off — provided the criteria continue to be met throughout.

The qualifying criteria are strict and all must be satisfied:

• Your total unsecured debt must be £50,000 or less
• You must have £75 or less left over each month after essential bills and outgoings
• If you own a car, it must be worth less than £4,000
• Your total other assets must not be worth more than £2,000
• You cannot be a homeowner
• You cannot currently be subject to bankruptcy or IVA proceedings, and must not have had a DRO approved in the last six years
• You must have lived or run a business in England, Wales or Northern Ireland in the last three years

If you meet all of those conditions, a DRO suspends creditor action immediately. Lenders must stop chasing you for the debt. At the end of 12 months, qualifying debts are written off. Although the process is court ratified, you do not attend court.

You cannot apply for a DRO yourself. You must use an approved intermediary — typically a debt adviser working with an authorised organisation. Lightside does not administer DROs directly, but if your circumstances suggest a DRO is the right route, we will tell you clearly and direct you to the right support. Citizens Advice can help you access a DRO through their approved intermediary service.

Some debts are not included in a DRO. Student loans, criminal fines, child maintenance, and certain court compensation orders are exempt and remain payable during and after the DRO period.

There are restrictions during the DRO period. You cannot borrow £500 or more without disclosing that you are subject to a DRO. You cannot act as a company director. Some forms of employment may be affected. A DRO can be revoked if you fail to cooperate, and a Debt Relief Restrictions Order can be made — extending the restrictions for up to 15 years — if you have acted irresponsibly, recklessly or dishonestly.

The DRO is registered on your credit file and remains there for six years, visible to landlords, employers and lenders. It also appears on the Individual Insolvency Register, a public register maintained by the Insolvency Service and accessible online.

The boundary between a DRO and bankruptcy is primarily the £50,000 debt threshold and the asset position. If your total unsecured debt exceeds £50,000, or if you own property, a DRO will not be available and bankruptcy or another solution may be more appropriate. If you are close to the thresholds — or unsure which side of them you fall on — taking advice before applying for either is important, because the choice has different consequences and the criteria need to be assessed carefully.

If you are unsure whether a DRO is the right route for your circumstances, our Too Much Debt page explains how we can help you understand your options.