What Is a Debt Relief Order (DRO)?
Last Updated: July 2026
Your complete guide to Debt Relief Orders in the UK. Find out if this free, formal route to writing off debt is the right option for your circumstances.
Reviewed by FCA-regulated debt advisors | Partnered with UK Insolvency Service regulated advisors
Compare All Debt SolutionsWhat is a DRO?
A Debt Relief Order (DRO) is a formal insolvency solution designed specifically for individuals with low income, minimal assets, and relatively low levels of debt. It is frequently referred to as an accessible alternative to bankruptcy, providing a 12-month period (called a moratorium) during which your creditors cannot take action to recover their money.
If your financial circumstances have not improved by the end of this 12-month period, the debts included in the DRO are entirely written off, granting you a financial fresh start. However, a DRO is not right for everyone, and it is crucial to consider free debt advice before applying.
Completely Free
The £90 fee was abolished in April 2024, making applications £0.
12-Month Moratorium
Your debts are frozen for one year, then written off if your situation is unchanged.
Legal Protection
Instantly stop debt collectors and freeze interest or charges.
The Legal Framework Behind DROs
Debt Relief Orders were introduced by the Tribunals, Courts and Enforcement Act 2007, which amended the overarching Insolvency Act 1986. They are administered by the Official Receiver via the Insolvency Service.
Importantly, significant regulatory updates occurred recently. The Insolvency (England and Wales) (Amendment) Rules 2024 and the Insolvency Proceedings (Monetary Limits) (Amendment) Order 2024 introduced major changes from 6 April 2024. These changes abolished the previous £90 application fee and, later in June 2024, increased the maximum debt threshold from £30,000 to £50,000. These sweeping updates were implemented to ensure the scheme remains accessible amidst rising living costs and inflation, as highlighted in the latest UK household debt statistics 2026.
Am I Eligible for a DRO?
The eligibility criteria for a Debt Relief Order are strict. As of the updates post-June 2024, you must meet all of the following conditions:
- Maximum Debt: Your total unsecured debt is no more than £50,000.
- Surplus Income: You have £75 or less per month in spare income after paying essential household bills. Using a budget balancer can help accurately calculate your surplus.
- Maximum Assets: The total value of your assets is no more than £2,000.
- Vehicle Exemption: You are allowed to own a single vehicle worth up to £4,000, which is excluded from the £2,000 asset limit.
- Location and History: You live in England, Wales, or Northern Ireland, and have not had a DRO in the last 6 years or are currently in an IVA or bankrupt.
Which Debts Can Be Included in a DRO?
A DRO covers the vast majority of consumer borrowing. Qualifying debts include credit cards, store cards, personal loans, payday loans, overdrafts, catalogue debts, and utility arrears.
However, certain debts are strictly excluded by law and must still be paid during and after the DRO. Excluded debts include secured debts (like mortgages or secured loans), student loans, court fines, child maintenance arrears, and debts incurred through fraud. Additionally, any new debt incurred after the DRO starts is not protected.
DRO Statistics: Rising Adoption
Following the abolition of the fee and the increase of the debt limit to £50,000, Debt Relief Orders have seen a massive surge in usage. According to official Insolvency Service data, a record 46,939 DROs were granted in 2025. This represents the highest annual total since the scheme was introduced in 2009, and a 9% increase on the previous year.
The momentum has continued, with 3,879 DROs granted in June 2026 alone. The changes have clearly made DROs a much more accessible and vital lifeline for those seeking government debt help.
The DRO Process: A Step-by-Step Guide
- Speak to an Authorised Intermediary: You cannot apply directly yourself. You must seek advice from an approved debt adviser (intermediary).
- Complete the Application: The intermediary will submit your application to the Official Receiver, detailing your income, assets, and debts.
- DRO is Approved: The 12-month moratorium begins immediately. Creditors cannot chase you or add interest.
- The 12-Month Moratorium: You must abide by all formal restrictions during this time.
- Discharge: If your financial situation hasn't improved after 12 months, the included debts are entirely written off.
DRO Restrictions During the Moratorium
While the DRO protects you from creditors, it is a formal insolvency and places severe restrictions on your financial behavior for 12 months. During the moratorium, you cannot borrow more than £500 without explicitly disclosing that you are subject to a DRO.
You also cannot act as a company director or manage a limited company without court permission. Importantly, you must inform the Official Receiver if your circumstances change—for example, if you receive a windfall or if your surplus income rises above £75 a month. If your situation improves significantly, the Official Receiver can revoke your DRO, leaving you liable for your debts once more.
What Happens After Your DRO?
At the end of the 12-month moratorium, provided your situation has not improved and your DRO hasn't been revoked, your qualifying debts are written off. You will no longer owe that money.
However, the impact on your credit file is lasting. A DRO remains on your credit record for 6 years from the date of approval. Because your file will show missed payments, defaults, and the insolvency itself, accessing mainstream credit will be challenging. When you're ready, you can start the recovery process by visiting a credit rebuilders hub, exploring our six-month rebuild plan, or checking your progress with a comprehensive credit report guide.
Alternatives to a DRO
If you do not meet the strict criteria for a DRO—perhaps your surplus income is higher than £75 or your debts exceed £50,000—you have other debt solutions to consider.
An Individual Voluntary Arrangement (IVA) might be suitable if you have a steady income to contribute over 5 years. If you prefer an informal arrangement without insolvency restrictions, a Debt Management Programme can help lower your monthly payments, though it won't legally write off your debt. If your debts are high and you own valuable assets you are willing to surrender, Bankruptcy remains the final formal option, though you should read the post-bankruptcy credit guide to understand the severe implications. Alternatively, you might utilize the government's Breathing Space scheme to pause enforcement for 60 days while you decide.
DRO and Mental Health
Debt and mental wellbeing are deeply intertwined. For individuals experiencing acute distress, assembling a DRO application can feel overwhelming. If you are receiving professional treatment for a mental health crisis, you may be eligible for a Mental Health Crisis Moratorium under the Breathing Space scheme. This provides powerful protections that last for the duration of your treatment plus 30 days, giving you the necessary time to recover before tackling insolvency. For further support, visit our mental health and money hub.
Pros and Cons of a DRO
Advantages
- Completely free to apply for (as of April 2024).
- All qualifying debts are written off after 12 months.
- Immediate legal protection from creditor action.
- Protects a single vehicle up to the value of £4,000.
Disadvantages
- Very strict eligibility criteria (max £75/month surplus).
- Negatively affects your credit rating for 6 years.
- Published on the public Individual Insolvency Register.
- Strict borrowing and employment restrictions apply for 12 months.
Frequently Asked Questions About DROs
What is a Debt Relief Order (DRO)?
A Debt Relief Order (DRO) is a free alternative to bankruptcy for people with a low income, minimal assets, and debts under £50,000. It freezes your debt repayments and interest for 12 months. If your financial situation hasn't improved after this period, your qualifying debts are entirely written off.
Who is eligible for a DRO?
The eligibility criteria for a DRO are strict. You must have debts of less than £50,000, have £75 or less a month surplus income after essential living costs, own assets worth no more than £2,000 in total (excluding a single vehicle worth up to £4,000), and live in England, Wales or Northern Ireland.
How much does a DRO cost?
A DRO is completely free. The previous £90 application fee was abolished on 6 April 2024, making it accessible to those struggling the most.
What debts can be included in a DRO?
Most common unsecured debts can be included, such as credit cards, store cards, personal loans, overdrafts, and utility arrears. You cannot include secured debts, student loans, court fines, child maintenance, or debts incurred due to fraud.
What are the DRO restrictions?
During the 12-month moratorium, you cannot borrow more than £500 without disclosing your DRO, you cannot act as a company director or manage a company without court permission, and you must inform the Official Receiver if your financial circumstances improve significantly.
Can a DRO be revoked?
Yes, if your financial circumstances improve significantly during the 12-month moratorium (for instance, your surplus income exceeds £75/month), or if it is discovered that you hid assets or debts, the Official Receiver can revoke your DRO. You would then be responsible for repaying your debts again.
What's the difference between a DRO and bankruptcy?
Both are formal insolvencies that write off debt after a period (usually 12 months). A DRO is free and meant for people with debts under £50,000, under £2,000 in assets, and £75 or less in surplus income. Bankruptcy has no debt limit but costs £680 to apply for, and any valuable assets (including home equity) can be sold to repay creditors.
How does a DRO affect my credit rating?
A DRO will stay on your credit file for 6 years from the date it is approved. During this time, obtaining credit will be very difficult. Your details will also be added to the public Individual Insolvency Register for the 12-month duration of the DRO plus an additional 3 months.
Don't Qualify for a DRO?
The criteria for a DRO are very strict. If your debts are higher or you have some spare income, an IVA or a Debt Management Programme could be a more suitable option. Check your eligibility for free.
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