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A debt relief order (DRO) is a formal, low-cost way to deal with debt in England and Wales, designed for people with a low income, very few assets, and a relatively small total amount owed. It’s less well known than an IVA or bankruptcy, but for the right circumstances it can clear qualifying debts without the costs associated with those other routes.
DROs were introduced to give people in genuine financial hardship, but without significant assets to protect, an accessible route out of debt that doesn’t carry the same costs as bankruptcy or the ongoing payments involved in an IVA.
If you’re wondering whether a DRO could apply to you, or comparing it with other debt solutions, this guide covers who it’s aimed at and what it involves.
Who is a DRO designed for?
A DRO is aimed at people who can’t realistically pay their debts but don’t have significant assets or disposable income that would support a debt management plan or an IVA. Eligibility depends on limits for your income, savings and other assets, and the total amount of debt included, all set out in current government guidance. Because these limits can change and have specific conditions, it’s best to check them directly on gov.uk or with a debt adviser rather than relying on a fixed figure.
What debts can be included in a DRO?
DROs generally cover unsecured debts, similar to an IVA or debt management plan, such as credit cards, personal loans, overdrafts and utility arrears. Secured debts like a mortgage aren’t included. Our guide on secured and unsecured debt explains this distinction in more detail if you’re unsure how a particular debt would be treated.
How long does a debt relief order last?
A DRO runs for 12 months. If your circumstances don’t change significantly during that period, for example a big rise in income or an inheritance, most of the included debts are written off at the end of the 12 months. This is considerably shorter than the typical term of an IVA, which our guide on how long an IVA lasts covers separately.
| Debt relief order | IVA | Bankruptcy | |
|---|---|---|---|
| Typical duration | 12 months | Usually 5 to 6 years | Usually discharged after 12 months |
| Aimed at | Low income, low assets, lower debt levels | Higher debt levels with some ability to pay | Wide range of circumstances |
| Homeownership with equity | Generally unlikely to qualify | Possible, home isn’t automatically included | Interest in the home can pass to a trustee |
| Credit file record | 6 years | 6 years from the start date | 6 years from the bankruptcy date |
Can homeowners get a debt relief order?
It’s generally unlikely if you own a home with meaningful equity, because the low asset limits that apply to a DRO mean owning valuable property tends to rule it out. If you’re a homeowner with some equity but significant unsecured debts, a debt management plan, an IVA or, in more serious cases, bankruptcy are the routes more commonly considered instead. Our comparison guide on debt solutions compared sets these options out side by side.
Does a DRO affect your credit file?
Yes. A DRO is recorded on your credit file for 6 years, in the same way as a default, CCJ or IVA, though the record itself starts from when the DRO is approved rather than from an earlier date. It’s also recorded on the Insolvency Register while it’s active, similar to bankruptcy and an IVA.
How do you apply for a debt relief order?
You can’t apply directly. A DRO has to be arranged through an approved intermediary, typically a debt adviser working for a debt charity, who will assess whether you meet the eligibility criteria and submit the application to the Insolvency Service on your behalf. This is different from an IVA, which is usually proposed with the help of an insolvency practitioner, or a debt management plan, which our guide on what is a debt management plan explains.
Your intermediary can confirm any current costs involved in applying, which are generally considerably lower than those typically associated with bankruptcy, and whether support is available if affording them is difficult.
What this means if you’re a homeowner
If you own your home, particularly with equity in it, a DRO is unlikely to be the option available to you, and it’s worth focusing on the solutions more commonly used by homeowners instead. Our guide on debt solutions compared walks through a debt management plan, an IVA and bankruptcy alongside the DRO, and our pages on remortgaging after an IVA, remortgaging with a debt management plan and remortgaging after bankruptcy explain how each can affect a future mortgage application.
If raising money through your home to clear debts is something you’re considering instead, our page on debt consolidation remortgages sets out the risk plainly: unsecured debt becomes secured against your home, and a longer term can mean paying more overall.
Where to get help
To find out whether a DRO could apply to you, speak to a free debt adviser rather than a fee-charging provider, since only approved intermediaries can submit an application anyway. MoneyHelper, StepChange and National Debtline can all assess your eligibility and explain the alternatives if a DRO isn’t right for your circumstances.
Frequently asked questions
Can a homeowner get a debt relief order?
It's generally unlikely if you have meaningful equity in your home, since DROs are aimed at people with very low assets. If you own a property with equity, other routes such as a DMP, an IVA or bankruptcy are more commonly considered. Check current eligibility limits on gov.uk or with a debt adviser.
How long does a debt relief order last?
A DRO lasts 12 months. Provided your circumstances don't change significantly during that time, most included debts are then written off. It's a shorter process than a typical IVA or the credit file record that follows bankruptcy.
Does a debt relief order affect your credit file the same way as an IVA?
Both are recorded for 6 years, but the starting point differs. A DRO record generally runs from when it's approved, while an IVA runs from its own start date. See our guide on how long an IVA stays on your credit file for the IVA comparison.
Can you apply for a debt relief order yourself?
You need to apply through an approved intermediary, usually a debt adviser at a debt charity or similar organisation, rather than applying directly. They assess your eligibility and submit the application on your behalf.