What is a debt relief order (DRO)?
Written by
Emily Tye
Reviewed by
Amy LancashireA debt relief order (DRO) is a formal way to deal with debts you can't repay. It's for people in England and Wales who owe £50,000 or less, have £75 or less spare each month and own very little. Once it's approved, you no longer have to pay the debts it covers, and after 12 months they're written off.
It's free, but you can only apply through an approved debt adviser. The trade-off is your credit file: a DRO stays on it for 6 years.
Over the last 2 years, more DROs have been made each month than at any time since they began in 2009. In August 2026, 3,880 were made in England and Wales.
How does a debt relief order work?
A debt adviser checks you're eligible. They look at your income, essential costs, debts and possessions.
They apply for you. The adviser sends your application online to the Insolvency Service. You don't have to go to court.
An official receiver decides. They work for the Insolvency Service, whose guidance for its own staff says applications are assessed within 2 working days of reaching its DRO team.
The DRO period starts. For 12 months, you don't have to pay the debts listed. GOV.UK says those creditors can't ask you for payment in this time, but they can still send statements. They'd need the court's permission to take legal action. You still need to pay your rent and bills.
Your debts are written off. After 12 months, you no longer have to pay the debts in your DRO, or any interest on them.
Who can get a debt relief order?
You need to meet all of these conditions:
Your debts add up to £50,000 or less
You have £75 or less left each month after essential costs, whether your income comes from work, benefits or both
Your savings and valuables are worth £2,000 or less in total
You don't own your home
You've lived or worked in England or Wales at some point in the last 3 years
You haven't had a DRO in the last 6 years
You're not bankrupt, in an IVA or going through another formal insolvency process
Your adviser works out your spare income using a full monthly budget. One vehicle worth less than £4,000 doesn't count towards the asset limit, and different rules apply to vehicles adapted for a disability. Homeowners are very unlikely to qualify, because a home counts at its full value, even with a mortgage.
The official receiver can also turn down an application if, in the 2 years before you apply, you sold or gave away anything for less than it was worth, or paid one creditor ahead of the others.
These rules cover England and Wales. Northern Ireland has its own DRO scheme with the same main limits, and Scotland has a different option called the Minimal Asset Process.
Which debts can I include in a DRO?
Most unsecured debts can go into a DRO. GOV.UK lists these as qualifying debts:
Credit cards, overdrafts and loans, including buy now pay later
Rent arrears
Gas, electricity and phone bills
Council tax and income tax
Benefit overpayments
Money you owe to friends or family
Some debts can't be included, so you'd still have to pay them:
Student loans
Child maintenance and money owed under a family court order
Court fines
Social Fund budgeting and crisis loans
Court-ordered damages for personal injury or death
Unpaid TV licence fees
Debts secured against something you own, such as a secured loan
Rent arrears need care. Once they're in your DRO, your landlord can't ask you to pay them, but GOV.UK's guidance for debt advisers says they can still take steps to evict you.
How do I apply for a debt relief order?
You can't apply for a DRO yourself. You need an approved debt adviser, sometimes called an intermediary. Their help is free and there's no application fee.
What can't I do during a DRO?
During the 12-month DRO period, you can't:
Borrow £500 or more, alone or jointly, without telling the lender about your DRO
Be a company director, or help set up, run or promote a company, without the court's permission
Trade under a different name without telling the people you deal with about the DRO
Breaking these rules can be a criminal offence, and can also lead to a Debt Relief Restrictions Order (DRRO), which extends them.
You also need to tell the Insolvency Service if your income goes up or you receive money or anything valuable, such as an inheritance. If you no longer meet the limits, the official receiver can cancel the DRO. GOV.UK says you'd then need to pay those debts again, plus any interest that built up during the DRO.
How long does a debt relief order last?
A DRO usually lasts 12 months, but some of its effects last much longer.
How long | |
|---|---|
The DRO period | 12 months, extended only in limited cases |
Your entry on the public Individual Insolvency Register | Until 3 months after the DRO period ends |
Your credit file | 6 years from the date the DRO was approved |
A DRRO, if you break the rules | 2 to 15 years |
Before you can get another DRO | 6 years |
How does a debt relief order affect my credit score?
A DRO is recorded on your credit file for 6 years from the date it was approved, and lenders who check your file in that time will see it. GOV.UK also says the debts in a DRO won't show as paid or settled, even after they're written off.
Any defaults on those accounts show too, and defaults stay on your file for 6 years from the date of default. Our guide on how to rebuild your credit score covers steps you can take while the DRO is still on your file. After 6 years, check your reports with Experian, Equifax and TransUnion to make sure it has been removed.
How is a DRO different from bankruptcy or an IVA?
Bankruptcy and an individual voluntary arrangement (IVA) are the other main formal debt solutions. A DRO is the cheapest of the three, but it's only open to people with lower debts and very few assets.
DRO | Bankruptcy | IVA | |
|---|---|---|---|
Cost to apply | Free | £680 | Usually a set-up fee, plus a handling fee each time you make a payment |
Who arranges it | An approved debt adviser | You apply online yourself | An insolvency practitioner |
How long it usually lasts | 12 months | 12 months, though payments from your income can continue for longer | 5 or 6 years |
A debt adviser can also explain informal options, such as a debt management plan (DMP), which doesn't write anything off. See how a DMP affects your credit score, or our wider guide on how to get out of debt.
FAQs
There are a range of financial products available that may suit your needs. We encourage you to research your options carefully and consider seeking independent financial advice before making any decisions. This blog is for informational purposes only and does not constitute financial advice.
