If you are experiencing problems with debt, the changes to Debt Relief Orders (DROs) for those living in England and Wales may help you to get things under control.

From June 2024, three key changes have been made to make Debt Relief Orders more accessible when resolving certain debts issues.

The three key changes are:

1) The £90 administration fee has been removed.

Although £90 may have been small in relation to amounts owed, evidence shows people were less likely to consider a DRO when this was needed upfront. With this barrier removed it should encourage those with issues to engage and get things under control.

2) The amount of debt has been increased from £30,000 to £50,000.

Where higher debt amounts exist individuals would have had to consider more expensive solutions such as bankruptcy, which has an upfront cost of £680. By increasing the amount of debt eligible for DROs with no up front costs it should encourage more people to take action to resolve their debt issues.

3) You can own a vehicle worth up to £4,000 and still qualify.

A car may be an essential part of moving forward from debt such as needing one for work, mobility and everyday family needs. The value of the car that can be owned has been raised from £2,000 to £4,000 and should  enable more people to access a DRO..

A word on debt relief orders

DROs are an option to help get debt under control, but not everyone will be eligible and nor will they suitable on every occasion. DROs allow an individual to stop making payments towards debt for 12 months, after which the debt may no longer need to be paid. Eligibility rules and restrictions include things such as amount and type of debt, having low disposable income, not owning a home and having lived or worked in England or Wales in the last three years (Variations exist in Northern Ireland and Scotland).

During a DRO there are restrictions on further borrowing and being involved in running a business. There is a need to demonstrate you can continue to pay your rent, bills and certain debts not included in the DRO, such as student loans or court fines.

Where to get help and how to apply

You will need the support of a Regulated Debt Adviser to apply for a DRO and the government’s Money Helper service will give free guidance on options available.

Money Helper

Aspire’s Money Matters Service supports people with everyday money issues, including debt problems and budgeting. It is a phone-based service and is available on Mondays and Tuesdays

Money Matters

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