A Debt Relief Order (DRO) is a way of dealing with debt for people on a low income who own very little. It freezes your debts for 12 months and, if your circumstances have not improved by the end of that period, the debts covered by the order are written off completely. There are no monthly payments to make.
A DRO is often described as a lighter, cheaper alternative to bankruptcy, and it is aimed squarely at people who genuinely cannot afford to repay what they owe. To qualify you must meet strict limits on your debts, your income and your assets, which we set out below.
The short answer
- A DRO is for people with low income, few assets and debts they cannot realistically repay.
- Your qualifying debts must currently total no more than £50,000.
- Your assets must be worth under around £2,000, and any vehicle worth up to about £4,000.
- You need very little spare income left after essential living costs.
- The application fee was removed in 2024, so there is currently no charge to apply.
- After 12 months, the debts included are usually written off.
Who qualifies for a DRO?
The eligibility rules changed in 2024, and the thresholds below are the ones that currently apply. Because figures like these can be updated, it is always worth checking the latest limits before you apply.
- Debt level: your qualifying debts currently total no more than £50,000.
- Spare income: you have very little left over — usually no more than a small amount each month after essential living costs.
- Assets: the things you own are worth under around £2,000 in total.
- Vehicle: you may keep a car or van worth up to roughly £4,000.
- Residency: you usually need to live, work or own property in England or Wales, and not have had a DRO in the last six years.
Because these thresholds can change over time, treat the figures as a guide and check your exact position with an adviser. You can read more about how a DRO fits alongside other options on our Debt Relief Orders page.
What debts can a DRO cover?
Most everyday debts can be included, such as credit cards, personal loans, overdrafts, council tax arrears, benefit overpayments and some utility arrears. A few debts cannot be — for example, court fines, student loans and child maintenance usually fall outside a DRO.
How does a DRO work once it's granted?
When your DRO is approved it enters a 12-month "moratorium" period. During this time you do not make payments towards the included debts, and the creditors listed cannot take action to recover the money or add further interest and charges. You must not take on new borrowing over a certain limit, and you need to tell the official receiver if your circumstances improve.
If, at the end of the 12 months, your situation has not changed for the better, the debts covered by the order are written off. If your finances improve significantly during the year — for example, you come into money — the DRO may be revoked and you would need to look at other options.
DRO, IVA or bankruptcy?
A DRO is not the only route out of serious debt, and the right choice depends on what you owe and what you own. If you have some spare income each month, an IVA might let you make affordable payments while protecting your assets; you can check the basics in our guide to whether you can get an IVA on benefits. If your debts are higher than the DRO limit or you have valuable assets, bankruptcy may be the better fit. Our guide comparing whether an IVA is better than bankruptcy can help you weigh things up.
Both a DRO and bankruptcy are forms of insolvency and will appear on the public Individual Insolvency Register, and both will affect your credit file for six years. For a wider view of the different routes, our guide on clearing your debts yourself is a useful starting point.
How IVA Advice Online can help
If money is extremely tight and you own very little, a DRO could offer a genuine fresh start — but it is only one of several options, and getting the right advice matters. Our advisers can help you understand whether you meet the DRO criteria or whether another solution would serve you better, and point you towards free support such as MoneyHelper where it helps. Our advice is always free and completely confidential — to talk things through, get in touch with our team.