The following is a guest post from Debt Advisory Line.
The numbers of those in danger of defaulting on their debts have long reached worrying levels all across the UK. 13,653 people were declared bankrupt in England between July and September 2010. Faced with these troublesome developments, the UK government was forced into action. In April of 2009, it introduced Debt Relief Orders as a new procedure aimed at offering an alternative to bankruptcy. The move can certainly be considered a success: Today, debt relief orders are generally regarded as a powerful tool and have proven their efficacy. You, too, could benefit from them.
Essentially, a Debt Relief Order is a streamlined version of bankruptcy procedure available to those facing somewhat lower levels of debt. Everything about it is designed to simplify, speed up and soften the frequently stressful bankruptcy procedure, making DROs far more easy to apply for and far less bureaucratic in execution. At a mere £90, a Debt Relief Order is considerably cheaper, too, compared to the high price of an insolvency. If you qualify for a Debt Relief Order and if it turns out to be successful, your debts may be written off as soon as one year after the Debt Relief Order is granted – a perspective that doesn’t come without its conditions, but should give hope to all households who thought bankruptcy was their only option.
So what exactly does a Debt Relief Order do? Put simply, it establishes that you can no longer repay your debts to your creditors and then calls in a moratorium period. For one year, all debts included in the Debt Relief Order are frozen, providing you with some breathing space and with a chance to sort out your finances. After the Debt Relief Order has elapsed and should your financial situation still not have improved, your outstanding debts will be written off, allowing you to make a fresh start again.
Needless to say, a Debt Relief Order is neither a panacea, nor does it come without conditions. It is still a very serious matter and only applicable in case there really is no other alternative available. Among others,
- you must truly be unable to pay off your debts. If your financial situation improves during the time of a Debt Relief Order, you may still have to pay back your creditors.
- your total debts must not exceed £15,000.
- Your total gross assets should be less than £300.
- Your surplus income, after taking off normal living expenses, must not be more than £50 per month.
A professional debt adviser will be able to realistically assess your financial situation to establish whether a Debt Relief Order is indeed the best option in your particular case and provide you with the necessary information to make your application a success. Once you’ve checked that you meet the obligations attached to a Debt Relief Order, he will also, as an approved intermediary, help you with applying to The Insolvency Service for a DRO by filling out an online form.
At the Debt Advisory Line, we can assist you with finding out whether a Debt Relief Order really is the best alternative for you and whether you qualify for one. Contact one of our debt advisers now to inform you about all the important details of a Debt Relief Order procedure.