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If you have personal debts that you can’t afford to pay and you meet the qualifying criteria a Debt Relief Order can be a cheaper alternative to going bankrupt.

This page gives you the facts about Debt Relief Orders, read on to see if you qualify or call 0800 1804 933 for specific advice.

What Is A Debt Relief Order?

A debt relief order is a Court Order granted by an application through The Insolvency Service. They are designed to help people on low incomes that are struggling to keep up payments on their debts. A debt relief order is a better alternative to bankruptcy in certain circumstances.

Do you qualify for a Debt Relief Order?

Not everyone will be able to get a debt relief order. To qualify you must meet the following key criteria;

• You have under £20,000 of ‘qualifying debts’*.
• You have under £50 disposable income per month.
• Your personal assets are worth less than £300, including savings.
• If you own a car, it must be worth less than £1,000.
• You must not currently be bankrupt or in an IVA.

*Qualifying debts include credit cards, loans, overdrafts, HP agreements, rent, utility bills, council tax and several other types of debt. If you own a property, even with a mortgage secured against it, it is extremely unlikely you will qualify for a debt relief order.

Debt Relief Orders for Self-Employed People

If you are self-employed and apply for a debt relief order you will not be allowed to act as a Company Director without specific Court permission. In addition, there will be many restrictions placed on carrying on business as a Sole Trader or Partnership. If you are self-employed, it is essential that you take specific advice before applying for a debt relief order.

How does a Debt Relief Order work?

• A debt relief order normally lasts for 12-months.
• During the period of the order you will not be required to make any payments to the creditors listed in the application.
• The creditors will not be able to pursue you for the money owed to them.
• Once the order finishes any debts remaining will be written-off.

 

If your circumstances change during the term of the order, you must inform the Official Receiver. Relevant changes include increases in income, windfalls, assets you have been given and changes to any benefits you receive. Failure to do this could be treated as an offence.

 

Implications of a Debt Relief Order

• You will not be allowed to build up any new debts or borrow any money whilst you are subject to the order without telling the lender you are subject to a debt relief order.
• Details of the Debt Relief Order will remain on your credit file for 6-years. This may make it difficult to obtain credit in the future.
• If the Official Receiver believes you have provided false or inaccurate information they may apply for a Debt Relief Restriction Order for up to 15-years.

Your Next Step

The information on this page should only be used as a guide. We recommend you call 0800 1804 933 for specific advice based on your circumstances.

 

Please Note:

Anderson Brookes does not provide ‘Debt Relief Orders’. In the event we believe a Debt Relief Order may be the most suitable debt solution we will provide you with the contact details of a reputable, non-fee charging organisation.

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Anderson Brookes Ltd

Anderson Brookes Ltd provides advice to individuals, business owners and company directors that are struggling with debt. Anderson Brookes Ltd is Authorised and Regulated by the Financial Conduct Authority; our registration number is 669796. You can confirm our details on the FCA website www.fca.org.uk. Anderson Brookes Ltd is a limited company registered in England and Wales; company registration number is 4213701. You can read more about the services provided by Anderson Brookes Ltd by visiting OUR SERVICES. A printed copy of our Initial Disclosure Document will be provided to you before any Instructions are accepted from you. You can request a copy at any time by calling 01204 255 051. Some of the services provided by Anderson Brookes Ltd are not regulated by the Financial Conduct Authority.

Anderson Brookes Insolvency Practitioners Ltd

Anderson Brookes Insolvency Practitioners Ltd is a limited company registered in England and Wales; company registration number is 10324159. Registered office address is 4th Floor, Churchgate House, Bolton, Lancashire BL1 1HL. Brendan P Hogan is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Licence Number 101680.