There are strict criteria set out to define whether someone is eligible to undertake a Debt Relief Order or not. To be able to do so, you must meet the conditions outlined below.

• Your total unsecured debt must be less than £15,000
• Your disposable income must be less than £50 per month
• Your total assets must be less than £300 (although your car can be valued at up to £1000)
• You must have no realistic chance of paying off your debts within a reasonable time  

For more information about the suitability of a debt relief order, continue reading below:

Where to start

• Choose the solution – Use the “Which way should I turn” form to get your FREE DEBT REPORT
• Ask the experts – use the Debt Relief Order and Bankruptcy Forum
• Read expert articles about Debt Relief Orders and Bankrutpcy
• Call us now – speak to one of our advisors in confidence to see if a DRO is right for you.

Take the first step to beating your debt NOW – Call us free on 0800 077 6180

Resident in England or Wales

In addition to the criteria above you must live in England or Wales, or in the last 3 years have been resident or carrying on business in England or Wales

You must not be involved in any other formal insolvency procedure at the time of application for a Debt Relief Order. For example, you must not currently be a bankrupt person, be under a Bankruptcy Restrictions Order, be in an Individual Voluntary Arrangement or have had a Debt Relief Order in the last six years.

Personal Pension Funds

When debt relief orders were introduced in April 2009, if you had a personal pension valued at more than £300 you would not have been eligable for a debt relief order. However as of April 2011, this rule will be changed.

From April 2011, if you have a personal pension which is approved as defined under Section 11 (2) of the Welfare Reform and Pensions Act 1999, you can still start a debt relief order.

This means that the majority of occupational and personal pension schemes will now be allowed if someone undertakes a DRO.

Changes to personal circumstances

As with Bankruptcy, in order to obtain a Debt Relief Order and during its existence, you must provide information about you personal circumstances and co-operate with the Official Receiver. If the Official Receiver decides that monthly repayments are required, then these must be paid.

One of the main problems with a debt relief order is that if your income improves while you are in the arrangement meaning that your disposable income rises above £50 a month, the arrangement will fail and you will return to the position you were in before you started the DRO. In other words you will still owe 100% of your unpaid debt.

Given this situation, if you believe that your financial circumstance may improve within twelve months of going into a debt relief order, this solution may not be for you.

Arguably this has created a disincentive for people to work to improve their income and try to get a better return for their creditors while they are in a DRO.