How A Debt Relief Order Offers a Clear Path Back to Financial Stability
WHAT IS A DRO – AND WHAT’S CHANGED RECENTLY?
A Debt Relief Order is a streamlined insolvency measure designed for those with low income, minimal assets, and moderate unsecured debts. Over a 12‑month period, qualifying debts are frozen—and, if your circumstances remain unchanged, ultimately written off.
Recent reforms have made DROs more accessible:
No more application fee – Since 6 April 2024, the £90 charge was abolished.
Higher debt threshold – As of 28 June 2024, eligible unsecured debts increased from £30,000 to £50,000, widening access.
Greater vehicle allowance – You can now own a vehicle worth up to £4,000 without affecting eligibility.
These enhancements make DROs a more viable option for many facing financial hardship.
WHO CAN APPLY?
You may qualify if you meet all of the following:
Unsecured debts are under £50,000
Assets (excluding vehicle) total less than £2,000
Your vehicle is worth less than £4,000 or is adapted for a disability
Monthly disposable income is below £75
You have lived or conducted business in England or Wales within the last three years
You haven’t applied for another DRO in the past six years, and you're not currently in formal insolvency
WHAT CAN YOU EXPECT DURING THE DRO?
An approved intermediary—such as Citizens Advice or StepChange—will assess your case and submit your DRO application for free. If accepted by the Official Receiver:
You immediately benefit from a 12‑month moratorium—creditors must pause action and interest stops accruing
At the end of that period, if no change has occurred, listed debts are written off
The DRO stays on your credit record for six years and remains on the public Insolvency Register
PROS & CONS AT A GLANCE
Advantages:
Fast and accessible application via an intermediary; no court involvement required
Immediate freeze on debt collection and interest
No application charge
Drawbacks:
Strict eligibility criteria limit who can apply
The DRO remains on your public record and credit file
Any increase in income or assets during the 12-month term may lead to revocation
WHEN TO CONSIDER A DRO
You might explore a DRO if:
You're on a low income, with limited surplus to repay mounting debts
Other avenues—like budgeting advice or Breathing Space (a temporary 60-day pause)—have been exhausted
Your debts are under £50,000, you have minimal disposable income, and your assets fall below the thresholds
A FICTIONAL EXAMPLE TO ILLUSTRATE A DRO IN PRACTICE
To help bring the process to life, let’s look at a fictional example—created solely for illustrative purposes.
Emma, a self-employed freelancer from Leeds, has £35,000 in unsecured debt, no savings, and no disposable income after covering essential living costs. She’s receiving letters from creditors and feeling overwhelmed. With guidance from a debt charity, Emma applies for a DRO. Her application is approved, her debts are frozen immediately, and after 12 months—during which her financial situation does not improve—those debts are written off.
While Emma’s story is not real, it reflects the kind of situation that many people face and demonstrates how a DRO can offer breathing space and a fresh start when other options are limited.
A STRAIGHTFORWARD PATH TO DEBT CLARITY
While entering a Debt Relief Order (DRO) can feel like a daunting step, it often marks the beginning of financial clarity and control.
At Voscap, we support individuals in financial distress with clear, confidential advice—whether you're exploring a DRO, Breathing Space, or alternative debt solutions. Our initial assessments are free, and we work closely with regulated intermediaries to guide you through the process with confidence.
For no-obligation support, contact Voscap on 020 7769 6831 or email help@voscap.co.uk.
ABOUT VOSCAP
Voscap’s primary objective is to save your business. Our team of experts’ knowledge in restructuring and turnaround assignments is invaluable when assessing the best option available to your needs. With experience spanning several decades, we have the skill and resources to provide viable solutions within all industry sectors. All organisations go through difficult times and we are here to help. From small to multi-million turnover businesses, we have dealt with the most complex of cases. We offer an initial free assessment in analysing your financial position and providing clear and precise advice making your experience a simple non-complicated process.