Debt Relief Orders

The UK’s personal insolvency regime seeks to balance the need to provide debt relief to individuals in inescapable financial difficulties, giving them a ‘fresh start’, whilst making a return to creditors from the assets and income of the individual.

There are a number of different options available to help individuals in financial difficulty, ranging from informal arrangements with creditors to solutions within the statutory framework (including individual voluntary arrangements (IVAs), bankruptcy and debt relief orders (DROs)).

DROs were developed and introduced in April 2009 following a consultation by Government in 2004 (“A choice of paths: better options to manage over-indebtedness and multiple debt”) that identified there were people in long term debt difficulty who had nothing to offer their creditors, such as assets or disposable income, and for whom bankruptcy would be a disproportionate response. Delivered in partnership with the debt advice sector, DROs provide low cost, easy access to debt relief for those with relatively low levels of unmanageable debt, and no means with which to pay their creditors, providing a fresh start for the most vulnerable. At the end of the DRO period (usually 12 months) the debts included within the order are written off (‘discharged’) and the individual is no longer responsible for paying them.