A Debt Relief Order is a new form of insolvency which is available in Northern Ireland from 30th June 2011. A DRO is similar to bankruptcy but is cheaper and will help people who have relatively small debts (less than £15,000), little assets (less than £300) and available disposable income (less than £50).
Debt Relief Order
Insolvency means that you are unable to pay your debts when they become due and where you have more debts than assets that could be made available to pay them.
Disposable income is the amount you have left over after you have paid essential living costs.
The current fee is £90. Please note that this fee is non-refundable and will always be payable. Payment must be made via Post Office or Paypoint terminal.
The Insolvency Service must receive the fee within 20 days after the application has been sent. Your application will be automatically rejected if the Insolvency Service does not receive your payment within the 20 days. Be careful as it will take 10 days for your fee to clear. We would strongly suggest that you have the money ready once you have decided to apply for a DRO and pay for it on the same day as submitting your application.
You must apply for a DRO through an approved intermediary. An approved intermediary will be a debt adviser. Our Debt Action NI advisers are approved intermediaries who will be able to complete and send the form on your behalf. The application is sent to the Northern Ireland Insolvency Service who will decide whether to grant the Debt Relief Order.
To qualify for a DRO you must:
- Have no more than £15,000 of debt
- Have no more than £50 per month available income after living costs have been paid
- Have no more than £300 worth of assets (you are allowed 1 vehicle up to the value of £1,000). If you are a homeowner, you will not be able to apply for a DRO as your house is seen as an asset even if it is in negative equity. If you think you are suitable for a DRO, you should seek advice from one of our Debt Action NI advisers.
No the DRO will not be advertised in the paper. However, your name will be put on the Debt Relief Order Register. This DRO Register can be found on the Insolvency Service website and can be viewed by the public. In some circumstances, you will be able to stop your address from appearing in the register and you should seek advice from one of our Debt Action NI Advisers.
Your creditors will be told that the DRO has been made and as a result they cannot take any action in relation to the debt. Your DRO will usually last for 1 year. During this time, you must not make any payments towards the debts included in the DRO. You will be protected from any action by your creditors and in most cases, your debts will be written off once the DRO comes to an end. You must still pay your ongoing essential expenditure such as rent, rates utilities etc.
No you will not have to go to Court as the DRO application is made to the Insolvency Service who will decide whether to grant the DRO.